Question

Cash paid for interest on a loan is classified as a cash flow from financing activities in a statement of cash flows. Select one: True False Two different methods of determining and presenting the net cash flows from operating activities are the indirect method and the reconciliation method. Select one: True False The operating activities section of the statement of cash flows shows a reconciliation of net income to the net cash provided by operating activities amount under the direct method. Select one: True False The direct method of presenting the net cash flow from operating activities shows the major categories of operating cash receipts and payments. Select one: O True False

Answer 1

Part 1)

The correct answer is False

Explanation

Cash paid for interest on loan is displayed as cash outflow from operating activities.

Part 2)

The correct answer is False

Explanation

Two methods of cashflow from operating activities are direct and indirect method.

Part 3)

The correct answer is False

Explanation

Operating activities section of the statement of cash flows shows a reconciliation of net income to net cash income under indirect method

Part 4)

The correct answer is True

Explanation

Under direct method, in order to calculate the cash flow from operating activities, the major categories are cash receipt and cash payment .