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Problem 1: Which of the following is an example of cash equivalents?
a. Saving accounts
b. Currencies
c. Bank drafts
d. Money orders
e. Treasury bills
Problem 2: Which of the following is true of statement of cash flows?
a. It is not required to be presented under U.S. GAAP.
b. It connects income statement and balance sheet.
c. It is considered to be the least important financial statement by the investors.
d. It classifies cash flows into three different activities.
e. It uses ending T-account balances to determine the cash flows.
Problem 3: Rufus Corporation manufactures and sells bicycles. During the year, Rufus sold bicycles to customers and collected $8,000,000 in cash. Which type of activity does this transaction represents on a statement of cash flows?
a. Operating
b. Investing
c. Selling
d. Significant non-cash
e. Promotion
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