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Stocks 303: Understanding the Statement of Cash Flow

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1.
The statement of cash flow records inflows and outflows of cash as soon as income is earned or expenses incurred.
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False. It records income and expenses regardless of when they were earned or incurred.
2.
Equipment expenditures are included in which section of the statement of cash flow?
Choose wisely. There is only one correct answer.
Investing activities. Equipment is considered an investment.
3.
The operating activities section of the statement of cash flow covers cash flows associated with _______.
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Production and sales. It concerns itself with the cash flows of making and selling the companys products or services.
4.
The investing activities section of the statement of cash flow records the buying of machinery.
Choose wisely. There is only one correct answer.
True. Buying equipment is considered an investment activity by a corporation.
5.
Which of the following is not included in the statement of cash flow?
Choose wisely. There is only one correct answer.
Managing activities. The statement of cash flow does not include this.
6.
In a statement of cash flow, accounts receivable are listed in the section on cash flows from operating activities.
Choose wisely. There is only one correct answer.
True. Accounts receivable are operating activities.