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Question(s) / Instruction(s):

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

a)            True

b)            False


22.          Analysis reveals that a company had a net decrease in cash of $4,000 for the current year. Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the year-end cash balance is $21,000, the beginning cash balance was:

a)            $ 3,000.

b)            $ 7,000.

c)            $17,000.

d)            $25,000.

e)            $39,000.


23.          Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

a)            True

b)            False


24.          The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

a)            Operating activities.

b)            Financing activities.

c)            Investing activities.

d)            Schedule of noncash investing or financing activity.

e)            None of these. This is not reported on the statement of cash flows.


25.          The indirect method reports individual operating cash outflows and cash inflows by activity.

a)            True

b)            False


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