Multiple Choice Questions (MCQs)

Questions: 1-10

1.     (TCO B) Depreciation expense decreases net income but is not a use of _________.

2.    (TCO B) On a statement of cash flows that uses the indirect approach, calculation of cash flow from operations treats depreciation as an adjustment to reported net income because:

3.    (TCO B) Which of the following is true? The choice of LIFO vs FIFO will:

4.    (TCO B) An increase in accounts payable would be considered:

5.    (TCO B) Which of the following represents an investing activity in the statement of cash flows?

6.    (TCO B) Which of the following would affect cash flow from operations?

7.    (TCO B)  The statement of cash flows provides us with important clues on:

8.    (TCO B) A firm has net sales of $6,000, cash expenses (including taxes) of $2,800, and depreciation of $1,000. If accounts receivable increased in the period by $800, cash flows from operations equal _________.

9.    (TCO B)  A gain on sale of an asset would require adjusting net income IF the statement of cash flows is prepared using the:

10.  (TCO B) Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method?