#1
Which of the following activities involves the acquisition and disposal of long-term assets?
Operating activities
Investing activities
Financing activities
Production activities
#2
What does a positive cash flow from operating activities indicate?
The company is profitable
The company is facing financial troubles
The company is investing heavily in new projects
The company is repaying its debts
#3
What is the primary purpose of the statement of cash flows?
To show the profitability of a business
To assess the liquidity and solvency of a business
To evaluate the financial health of a business
To track the cash inflows and outflows of a business
#4
Which financial statement is directly linked to the statement of cash flows?
Income statement
Balance sheet
Statement of changes in equity
Statement of financial position
#5
Which section of the statement of cash flows includes cash received from selling goods or services?
Operating activities
Investing activities
Financing activities
Non-operating activities
#6
What does a decrease in accounts payable indicate for cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#7
In the statement of cash flows, what does 'cash equivalents' refer to?
Cash held in a company's bank account
Highly liquid investments with a maturity of three months or less
Cash used for operating activities
Cash paid for investments
#8
Which section of the statement of cash flows includes cash received from issuing stocks or bonds?
Operating activities
Investing activities
Financing activities
Non-operating activities
#9
Which of the following is a non-cash activity that appears on the statement of cash flows?
Cash received from customers
Depreciation expense
Interest paid
Cash paid for inventory
#10
What does a positive cash flow from financing activities indicate?
The company is generating excess cash
The company is facing financial difficulties
The company is investing heavily
The company is repurchasing its own shares
#11
Which of the following is NOT considered a financing activity?
Issuing bonds
Paying dividends
Obtaining a loan from a bank
Selling equipment
#12
How does depreciation affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on the method of depreciation
#13
What does a negative cash flow from financing activities indicate?
The company is facing financial difficulties
The company is profitable
The company is generating excess cash
The company is investing heavily
#14
How does an increase in inventory affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on the valuation method used
#15
Which of the following is NOT included in the operating activities section of the statement of cash flows?
Cash received from customers
Cash paid for inventory
Interest received
Cash paid for salaries
#16
How does a decrease in accounts receivable affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#17
How does an increase in accounts payable affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#18
What does a decrease in long-term debt indicate for cash flow from financing activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#19
Which section of the statement of cash flows includes the purchase of property, plant, and equipment?
Operating activities
Investing activities
Financing activities
Non-operating activities
#20
How does an increase in accounts receivable affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#21
A company reports a decrease in accounts receivable. How does this affect cash flow from operating activities?
Increases cash flow
Decreases cash flow
Has no effect on cash flow
Depends on other factors
#22
What is the formula to calculate free cash flow?
Operating cash flow - Investing cash flow
Net income + Depreciation - Capital expenditures - Change in working capital
Net income + Interest expense - Taxes
Operating cash flow - Financing cash flow
#23
What is the significance of a positive cash flow from investing activities?
The company is generating excess cash
The company is facing financial difficulties
The company is expanding or acquiring assets
The company is repurchasing its own shares
#24
What is the purpose of the indirect method of preparing the statement of cash flows?
To directly report cash inflows and outflows
To show changes in balance sheet accounts
To highlight investing activities
To emphasize financing activities
#25
What is the significance of a negative cash flow from investing activities?
The company is generating excess cash
The company is facing financial difficulties
The company is investing heavily
The company is repurchasing its own shares