7 Cash and the Statement of Cash Flows Online Quiz Questions

True or false: A company that reports a profit for the period must also report a net increase in cash and cash equivalents.

Select all the transactions classified as financing activities in the materials.

What is the name of the operating-section presentation method that reconciles net income to operating cash flow?

A company pays interest in cash on a loan. Under the typical U.S. GAAP classifications described in the materials, in which activity category does this cash payment belong?

During a period, a company collects $\$9{,}000$ from customers, pays $\$4{,}000$ to suppliers and employees, buys equipment for $\$2{,}000$, and borrows $\$3{,}000$. What is the net change in cash from these transactions? Enter the amount in dollars; no tolerance applies.

True or false: If a company acquires equipment by issuing a note rather than paying cash, the transaction appears as a cash outflow in the main investing section of the statement of cash flows.

Select all the transactions classified as investing activities in the materials.

A company receives cash from a customer for a sale. Which activity category best describes this cash receipt?

Which set of amounts is included in the statement's beginning and ending reconciliation under the U.S. GAAP guidance described in the materials?

Explain why a company can report a profit for a period but still have a net decrease in cash and cash equivalents. In your answer, contrast accrual-basis income with cash receipts and payments.

Which statement correctly distinguishes the direct and indirect methods for presenting operating cash flows?

Under U.S. GAAP, what is the maximum original maturity, in months, that an investment generally may have to qualify as a cash equivalent?

Under typical U.S. GAAP classifications, which category includes cash interest received?

A business pays cash to buy equipment that it will use for several years. Which activity category does this payment belong to?

A company receives cash after borrowing money from a bank. How should it classify the cash inflow?

A company can report positive cash flow for an accounting period while recording a net loss for that period.

A company acquires equipment by issuing a note instead of paying cash. How should this transaction be handled in the statement of cash flows?

A company pays its employees their wages in cash. How should this payment be classified on the statement of cash flows?