1
ACC 212 Ch 12 Questions with Correct Answers |
Updated (100% Correct Answers)
Which of the following financial statements shows the major types of business
activities that caused a company's cash to increase or decrease during the
accounting period? Answer: Statement of cash flows
Which of the following describes what is reported first within the statement of
cash flows? Answer: Operating activities section
Which of the following are examples of cash flows relating to operating
activities? Answer: - paying rent
-receiving dividends
- receiving interest
Which of the following are examples of cash flows relating to investing activities?
Answer: -disposal of equipment
-maturity of investments in securities
-purchase of investments in securities
Which of the following are examples of cash flows relating to financing activities?
Answer: -borrowing from lenders through formal debt contracts
-repaying principal to lenders
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, 2
Which of the following statements about the two alternative methods that may
be used when preparing the statement of cash flows are true? Answer: -The net
change in cash is always the same under both methods
-The two alternative methods only relate to the operating activities section.
Which of the following is the starting point when the indirect method is used to
compute cash flows from operating activities? Answer: Net income
Indirect method: depreciation Answer: added
indirect method: decreases in current assets Answer: added
indirect method: decreases in current liabilites Answer: subtracted
indirect method: increases in current assets Answer: subtracted
indirect method: increases in current liabilites Answer: added
Investing cash flow? Purchase of a patent for cash Answer: investing cash
outflow
Investing cash flow? receipt of cash dividend Answer: not an investing activity
Investing cash flow? sale of equipment for cash Answer: investing cash inflow
During the year, Martin Corporation sold an investment in bonds issued by
another company for $21,000. Those bonds had a cost of $20,000. Martin also
purchased the common stock of another company for $10,000. Which of the
following is the net cash provided by (used in) investing activities? Answer:
$11,000
© 2026 All rights reserved
ACC 212 Ch 12 Questions with Correct Answers |
Updated (100% Correct Answers)
Which of the following financial statements shows the major types of business
activities that caused a company's cash to increase or decrease during the
accounting period? Answer: Statement of cash flows
Which of the following describes what is reported first within the statement of
cash flows? Answer: Operating activities section
Which of the following are examples of cash flows relating to operating
activities? Answer: - paying rent
-receiving dividends
- receiving interest
Which of the following are examples of cash flows relating to investing activities?
Answer: -disposal of equipment
-maturity of investments in securities
-purchase of investments in securities
Which of the following are examples of cash flows relating to financing activities?
Answer: -borrowing from lenders through formal debt contracts
-repaying principal to lenders
© 2026 All rights reserved
, 2
Which of the following statements about the two alternative methods that may
be used when preparing the statement of cash flows are true? Answer: -The net
change in cash is always the same under both methods
-The two alternative methods only relate to the operating activities section.
Which of the following is the starting point when the indirect method is used to
compute cash flows from operating activities? Answer: Net income
Indirect method: depreciation Answer: added
indirect method: decreases in current assets Answer: added
indirect method: decreases in current liabilites Answer: subtracted
indirect method: increases in current assets Answer: subtracted
indirect method: increases in current liabilites Answer: added
Investing cash flow? Purchase of a patent for cash Answer: investing cash
outflow
Investing cash flow? receipt of cash dividend Answer: not an investing activity
Investing cash flow? sale of equipment for cash Answer: investing cash inflow
During the year, Martin Corporation sold an investment in bonds issued by
another company for $21,000. Those bonds had a cost of $20,000. Martin also
purchased the common stock of another company for $10,000. Which of the
following is the net cash provided by (used in) investing activities? Answer:
$11,000
© 2026 All rights reserved
