1. Which of the following is NOT a major segment of the statement of cash flows?

a. Operating activities.

b. Financing activities.

c. Investing activities.

d. Budgeting activities.
 
 

2. The three primary financial reports typically published by all publicly traded companies are the

a. balance sheet, income statement, and statement of cash flows.

b. income statement, statement of cash flows, and statement of owners’ equity.

c. balance sheet, income statement, and statement of owners’ equity.

d. balance sheet, income statement, and statement of retained earnings.
 
 

3. Which of the following items is NOT a major use of the statement of cash flows?

a. An explanation of what happened to a company’s cash during the year.

b. To estimate future cash flows from operations.

c. To determine the results of operations for the year.

d. To use in determining the quality of earnings of a company.
 
 

4. The primary purpose of the statement of cash flows is to

a. show the financial position of the company at a point in time.

b. show the changes in the cash account for the accounting period and what caused these changes.

c. show the results of operations of a company for a period of time.

d. help in reconciling the cash account with the bank statement.
 
 

5. The change in cash for the accounting period as shown in the statement of cash flows should equal the

a. net income for the accounting period.

b. change in retained earnings for the accounting period.

c. net difference in the cash balances shown in the accounting transaction worksheet for the accounting period.

d. cash balance in the balance sheet at the end of the accounting period.
 
 

6. For a retail clothing store, investing activities includes all of the following EXCEPT the

a. purchase and sale of merchandise.

b. making and collecting of loans, for example, notes receivable.

c. purchase and sale of fixed assets.

d. purchase and sale of investment securities.
 
 

7. For a retail grocery store, financing activities would include all of the following EXCEPT

a. cash paid to suppliers.

b. cash paid on a bank loan.

c. cash received on the issuance of capital stock.

d. cash received in the issuance of long-term bonds.
 
 

8. Cash withdrawn by the owner during the year would be shown in the

a. operating section of the statement of cash flows.

b. financing section of the statement of cash flows.

c. investing section of the statement of cash flows.

d. statement of retained earnings and not shown in the statement of cash flows.
 
 

9. Information in the statement of cash flows—direct method is taken primarily from the accounting transaction worksheet’s

a. retained earnings column.

b. "RED" column.

c. explanation column.

d. cash column.
 
 

10. Solvency refers to

a. a company’s earned net income.

b. a company having more assets than liabilities.

c. the ability of a company to pay its debts when they become due.

d. how quickly a company can convert its assets into cash.
 
 

11. Selected data from the cash column of the accounting transaction worksheet of the Geotha Company is presented below. Use this information to answer the question following the data.

Based on the information above for the Geotha Company, the amount of net cash flow from financing activities was

a. Zero.

b. $2,000.

c. $5,000

d. ($3,000).
 
 

12. Selected data from the cash column of the accounting transaction worksheet of the Geotha Company is presented below. Use this information to answer the question following the data.

Based on the information above for the Geotha Company, the amount of net cash flow from investing activities was

a. Zero.

b. $5,000

c. ($3,000).

d. $2,000.
 
 

13. Selected data from the cash column of the accounting transaction worksheet of the Geotha Company is presented below. Use this information to answer the question following the data.

Based on the information above for the Geotha Company, the amount of net cash flow from operating activities was

a. $1,600.

b. $4,600.

c. ($400).

d. $6,600.