Question

Treasury stock purchases made with cash are classified as cash outflows from financing activities on the statement of cash flows.

Answer: True

Feedback: Repurchases of stock made with cash are classified as cash outflows from financing activities.

7. The approach to preparing the cash flow statement relies on the following rearrangement of the balance sheet equation: Change in cash = Change in (Liabilities + Stockholders Equity + Noncash Assets).

Answer: False

Feedback:

Assets = Liabilities + Stockholders Equity

Cash + Noncash Assets = Liabilities + Stockholders Equity

Cash = Liabilities + Stockholders Equity Noncash Assets

Change in cash = Change in (Liabilities + Stockholders Equity Noncash Assets)

Answer

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