Question

Cash flows from financing activities do not include:

Multiple Choice

• repayment of a bank loan.

• cash received from issuing preferred stock.

• declaration of a cash dividend.

• cash paid for treasury stock.

Sales revenue for Hy Marx Tutoring was $320,000. The following data are from the accounting records of Marx:

Accounts receivable, January 1	$	76,000
Accounts receivable, December 31		60,000

The cash received from customers was:

Multiple Choice

• $260,000.

• $304,000.

• $320,000.

• $336,000.

Cash equivalents have each of the following characteristics except:

Multiple Choice

• Little risk of loss.

• Short-term.

• Maturity of at least three months.

• Highly liquid.

Which of the following is reported as an operating activity in the statement of cash flows?

Multiple Choice

• The retirement of bonds.

• The acquisition of treasury stock.

• The purchase of long-lived assets.

• The payment of prepaid insurance.

Which of the following causes a change in cash?

Multiple Choice

• Accrual of interest payable.

• Write-off of an uncollectible account.

• Payment of a cash dividend declared in the previous fiscal year.

• Recording of depreciation expense.

Answer 1

1

Cash flows from financing activities do not include declaration of a cash dividend.

Option C is correct

2

Cash received from customers = 320000+76000-60000= $336,000.

Option D is correct

3

Cash equivalents have each of the following characteristics except Maturity of at least three months.

Cash equivalents have Maturity of less than three months.

Option C is correct

4

The payment of prepaid insurance is reported as an operating activity in the statement of cash flows

Option D is correct

5

Payment of a cash dividend declared in the previous fiscal year causes a change in cash.

Option C is correct

Answer 2

The answer to 1 is C.