Multiple choice From cash flow statement?

1.The information in a cash flow statement will help users assess all of the following except a.the company’s ability to generate future cash flows. b.the company’s ability to pay dividends and meet obligations. c.the company’s ability to turn over its accounts receivable. d.the reasons for the difference between net income and cash provided or used by operating activities. 2.Which of the following characteristics does not apply to cash equivalents? a.Short-term b.Highly-liquid c.Readily convertible into cash d.Highly sensitive to interest rate changes 3.The acquisition of land by issuing common shares is a.a noncash transaction which is not reported in the body of a cash flow statement. b.a cash transaction and would be reported in the body of a cash flow statement. c.a noncash transaction and would be reported in the body of a cash flow statement. d.only reported if the cash flow statement is prepared using the direct method. 4.All of the following are examples of significant noncash activities except a.the issue of common shares to purchase an asset. b.the write-off of an uncollectible account receivable. c.the issue of debt to purchase an asset. d.the conversion of bonds into common shares. 5.In preparing a cash flow statement, a conversion of bonds into common shares will be reported in a.the financing section. b.the "extraordinary" section. c.a separate schedule or note to the financial statements. d.the shareholders' equity section. 6.Potter Limited reported a net loss of $10,000 for the year ended December 31, 2007. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and amortization expense of $5,000 was recorded. During 2007, operating activities a.used net cash of $2,000. b.used net cash of $8,000. c.provided net cash of $2,000. d.provided net cash of $8,000. 7.Which of the following would not be an adjustment to net income using the indirect method? a.Amortization expense b.An increase in prepaid insurance c.An increase in inventories d.An increase in land 8.Using the indirect method, if equipment is sold at a gain, the a.sale proceeds received are deducted in the operating activities section. b.sale proceeds received are added in the operating activities section. c.amount of the gain is added in the operating activities section. d.amount of the gain is deducted in the operating activities section. 9.The loss on the sale of equipment will a.be added to net income in the operating section of the cash flow statement. b.be deducted from net income in the operating section of the cash flow statement. c.be shown as a cash outflow from investing activities. d.not be included in the cash flow statement as it is a noncash charge. 10.Stapp Corp. had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Stapp's cash payments to suppliers? a.$135,000. b.$85,000. c.$125,000. d.$95,000.

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