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Cash Flows Structure Review Questions

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  1. Investment earnings are sometimes included in operating income. Should the cash flows be classified as an operating activity?
    1. Yes, if investment earnings are included in operating income, then they are operating activities
    2. No, investment earnings should be classified in the Investing Activities category
  2. Program loans are defined as:
    1. investing activities of a governmental enterprise
    2. governmental loan programs that provide a direct benefit to individual constituents
    3. all loans made
    4. all of the above
  3. Cash flows from operating activities include:
    1. all cash transactions that are part of the operating income
    2. all other transactions that do not fit one of the three other classifications
    3. cash receipts from state appropriations
    4. payments to acquire equity instruments
  4. Investing activities include:
    1. making and collecting loans (except program loans)
    2. borrowing money for purposes other than to acquire, construct, or improve capital assets
    3. receipts from sales of goods and services
    4. proceeds from debt issuance
  5. Noncash transactions must be disclosed if:
    1. the transaction is noncash
    2. the transaction affects assets or liabilities
    3. the transaction is an investing, capital, or financing activity
    4. all of the above
  6. An entity has an operating loss of $110,500 and a net loss of $106,000. The Statement of Revenues, Expenses, and Changes in Retained Earnings show $245,000 of depreciation. Last fiscal year, accounts payable was recorded as $65,500 and this fiscal year it was $68,000. What is the net cash provided by operating activities?
    1. $137,000
    2. $141,500
    3. ($353,000)
    4. ($136,500)
  7. Sample Agency (400) received $912,000 from customers, $100,000 from operating grants, and $10,000 from the sale of equipment. What is the net cash provided by operating activities?
    1. $100,000
    2. $912,000
    3. $1,012,000
    4. $1,022,000
  8. Sample Agency (400) purchased $125,000 of investment securities and proceeds from the sale and maturities of investments were $75,000. As of the 8/31/X1 balance sheet, restricted investments were $60,000 and as of the 8/31/X2 balance sheet, they were $110,000. $9,000 of investment interest was earned. What is the net cash used in investing activities?
    1. $41,000
    2. $50,000
    3. $59,000
    4. $179,000
  9. An agency receives $250,000 from the sale of revenue bonds designated for capital, $10,000 from the sale of equipment, and $60,000 from Capital contributed by subdividers. $75,000 of principal was paid on the revenue bonds, and $75,000 was transferred out to other funds. What is the net cash used for capital and related financing activities?
    1. $170,000
    2. $245,000
    3. $320,000
    4. $500,000

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