Analysis Intermediate: Understanding the Statement of Cash Flow

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1.
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.
2.
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.
3.
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.
4.
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.
5.
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.
6.
In a statement of cash flow, accounts receivable are listed in the section on cash flows from operating activities.
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True. Accounts receivable are operating activities.