Use the Following Codes to Indicate How the Cash Flow

question 31

Multiple Choice

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method.
-Declared cash dividends.

• A)Inflow from operating activity
• B)Outflow from operating activity
• C)Inflow from investing activity
• D)Outflow from investing activity
• E)Inflow from financing activity
• F)Outflow from financing activity
• G)Noncash investing and financing activity
• H)Not reported on statement of cash flows

---

Definitions:

Quantity Discount

A reduction in price given by a seller to a buyer for purchasing a larger quantity.

Purchase Discount

A deduction from the gross amount of an invoice allowed by the seller to the buyer for early payment.

Sales Taxes

Taxes imposed by governments on sales of goods and services, collected by the retailer at the point of sale and passed on to the government.

Revenue

The increase in assets or decrease in liabilities resulting from the sale of goods or the performance of services in the normal course of business.