1. Which of the following events would be recognized under the financing activit

Question

1. Which of the following events would be recognized under the financing activities section of the statement of cash flows? Please circle all that apply:

I. Paid out a cash dividend to shareholders

2. Issued a bond directly to a manufacturer as purchase of a piece of equipment

3. Issued a stock dividend to shareholders

4. Paid interest on an outstanding bond payable

5. Issued a bond for cash to purchase a building

6. Purchase of company’s own stock from the market

7. Cash received from bond maturity

2. Which of the following statements are false? Circle all that apply:

The statement of cash flows helps users see the reasons for the difference between net income and net cash provided (used) by operating activities

Both the Direct Method and Indirect Method arrive at the exact same total amount for net cash provided (used) by operating activities

The statement of cash flows helps users examine the entity’s ability to pay dividends and meet future obligations

Noncash activities are not reported in the body of the statement of cash flows

The Ending Cash Balance on the statement of cash flows must always equal the cash amount recorded on the Balance Sheet

Explanation / Answer

The following are the events recognised under financing activities section of the statement of cash flow, 1 Paid out a cash dividend to shareholders 2 Issued a bond for cash to purchase a building 3 Purchase of company’s own stock from the market

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