Analysis Intermediate: Understanding the Statement of Cash Flow

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1.
In the operating activities section of the statement of cash flow, you will find information on stock dividends paid.
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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.
2.
The investing activities section of the statement of cash flow records the buying of machinery.
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True. Buying equipment is considered an investment activity by a corporation.
3.
In which part of the statement of cash flow would you find debt issues recorded?
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Cash flows from financing activities. Debts are listed in this section.
4.
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.
5.
Equipment expenditures are included in which section of the statement of cash flow?
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Investing activities. Equipment is considered an investment.
6.
Which of the following is not included in the statement of cash flow?
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Managing activities. The statement of cash flow does not include this.