1. The prepaid expense account decreased during the year. This is a ___________ of cash reported in the _____________ section of the statement of cash flows.

Use; operating

Source; operating

Use; investing

Source; investing

Use; financing

Source; financing

2. A company paid dividends of $19,000 this year. If ending retained earnings is $185,000 and beginning retained earnings is 145,000, was what was the net income earned for the year?

$31,000

$40,000

$59,000

($31,000)