Analysis Intermediate: Understanding the Statement of Cash Flow

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1.
On a companys statement of cash flow, the sale of property is recorded as a ______.
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Cash inflow. It generates incoming cash.
2.
The statement of cash flow is divided into three sections. Which of the following is not one of those sections?
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Cash flows from common stock issued. Common stocks do not have their own section.
3.
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.
4.
An income statement records only cash received.
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False. It records revenue even when the revenue has not been received.
5.
Why is depreciation added to net income when calculating a firms cash flow from operating activities?
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Cash is not paid out for it. Because the statement of cash flow records inflows and outflows of cash, depreciation must be added to net income, since it cannot be subtracted from it.
6.
Financing activities include stock and bond investments.
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True. The financing section of the statement of cash flow records a companys investments.