CHAPTER 9 NAME ___________________________________
TEN-MINUTE QUIZ SECTION _____________ DATE____________
_____________________________________________________________________________
_
_____ 1. Two methods of preparing the statement of cash flows are the:
a. Direct and operating methods
b. Indirect and investing methods
c. Direct and indirect methods
d. Operating and investing methods
_____ 2. The difference between the direct method and the indirect method applies only to:
a. Operating section
b. Investing section
c. Financing section
d. Indirect section
_____ 3. Cash flows from operations include:
a. Cash received from customers
b. Cash paid for dividends
c. Cash paid for interest
d. All of the above
_____ 4. Cash flows from investing include:
a. Cash proceeds from the sale of property, plant, and equipment
b. Cash borrowed to buy property, plant, and equipment
c. Cash dividends paid
d. All of the above
_____ 5. Cash inflows from financing include:
a. Cash proceeds from loans
b. Cash loaned to others
c. Cash paid for interest
d. All of the above
_____ 6. According to generally accepted accounting principles, the preferred method of
computing operating cash flows is the:
a. Direct method
b. Sales method
c. Allowance method
d. Indirect method
_____ 7. Cash from investing activities includes all cash receipts and disbursements for:
a. Long-term business assets
b. Long-term loans
c. Contributions from and distributions to owners
d. All of the above
_____ 8. Cash from financing activities includes all cash receipts and disbursements for:
a. Long-term business assets
b. Long-term loans
c. Interest
d. All of the above
_____9. Print Fast, Inc. disclosed the following items:
Issuance of mortgage $70,000
Purchase of land 50,000
Payment of cash dividends 25,000
Sale of equipment 10,000
How much is cash flow from financing activities?
a $95,000 inflow
b $85,000 outflow
c $45,000 inflow
d None of the above
_____ 10. Free cash flow equals:
a Net increase in cash during the period
b Cash flows from operating activities divided by cash flows for capital
expenditures – cash proceeds from the sale of capital assets
c Cash flows from operating activities – cash dividends – capital
expenditures
d The balance of cash
ANSWER KEY – CHAPTER 9 – TEN-MINUTE QUIZ