1. All of the following should be recorded in the operating activities section of the statement of cash flows EXCEPT:

a decrease in inventory.

the total credits to the accumulated depreciation account.

a decrease in prepaid expenses.

a purchase of equipment in exchange for cash.

an increase in income taxes payable.

2. Which of the following would be classified as a financing activity on the statement of cash flows?

Interest paid to a lender.

Dividends paid to the company's common stockholders.

Cash paid to acquire a long-term investment.

Cash received from a loan that was made to another company.

3. In a statement of cash flows, all of the following would be classified as financing activities except:

the collection of cash related to a loan made to another entity.

the payment of a cash dividend on the company's own common stock.

the cash paid to retire bonds payable.

the sale of the company's own common stock for cash.

4. The statement of cash flows:

serves as a replacement for the income statement and balance sheet.

explains the change in the cash balance at one point in time.

explains the change in the cash balance for one period of time.

both A and B above.

5. In a statement of cash flows, receipts from sales of property, plant, and equipment should be classified as a(n):

Operating activity.

Financing activity.

Investing activity.

Selling activity.