Reference no: EM132807003

TRUE/FALSE

Question 1: Cash, as the term is used for the statement of cash flows, could indicate either cash or cash equivalents.

Question 2: The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

Question 3: The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.

Question 4: Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income.

Question 5: To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Question 6: Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

Question 7: Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

Question 8: Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.

Question 9:  Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.

Question 10: Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

Question 11: Amounts held in cash equivalent investments must be reported separately from amounts held as cash in the statement of cash flows.

Question 12: The purchase of treasury stock is an investing cash outflow.

Question 13: Interest payments on debt are classified as cash outflows from financing activities.

Question 14: The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

Question 15: There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.