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1.
Why is the statement of cash flow important to investors?
It helps investors determine the financial well-being of companies. The statement of cash flow does not make recommendations, nor can it provide actual data on the future.
2.
An income statement records only cash received.
False. It records revenue even when the revenue has not been received.
3.
In the operating activities section of the statement of cash flow, you will find information on stock dividends paid.
False. The operating activities section of the statement of cash flow does not cover stock. It concerns itself only with cash flow related to production and sales.
4.
A firms production and sales cash flows are recorded in the _______ section of the statement of cash flow.
Operating. The operating section includes inflows and outflows of money related to production and sales.
5.
The investing activities section of the statement of cash flow records the buying of machinery.
True. Buying equipment is considered an investment activity by a corporation.
6.
In which part of the statement of cash flow would you find debt issues recorded?
Cash flows from financing activities. Debts are listed in this section.
