In Preparing a Company's Statement of Cash Flows for the Most

question 5

Multiple Choice

In preparing a company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

• A)$234,000 of net cash used.
• B)$120,000 of net cash provided.
• C)$340,000 of net cash used.
• D)$259,000 of net cash used.
• E)$280,000 of net cash provideD.

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Definitions:

Beginning Inventory

The inventory value ready for sale at the onset of an accounting cycle.

Reported Net Income

The profit or loss of a company after all expenses have been deducted from revenues, as presented in financial statements.

Accrued Payroll Liabilities

Obligations for salaries and wages that have been incurred but not yet paid to employees.

Retained Earnings

The portion of net income that is not distributed as dividends to shareholders, but retained by the company for reinvestment in its operations.