Indicate whether each of the following statements regarding the statement of cash flows (SCF) is true or false. ________ a) Purchase of treasury stock would appear in the financing activities section of the SCF.________ b) Purchase of merchandise on account would appear in the operating activities section of the SCF.________ c) Payment of an account payable is an operating activity.________ d) Purchase of office supplies with cash would appear in the operating activities section of the SCF.________ e) Declarations of cash dividends would appear in the financing activities section of the SCF.
What will be an ideal response?
a) T b) F c) T d) T e) F
a) This is true. The purchase of treasury stock is a financing activity.
b) This is false. The purchase of merchandise on account would not be reported on the statement of cash flows.
c) This is true. A payments on an account payable is an operating activity.
d) This is true. The purchase of office supplies with cash is an operating activity.
e) This is false. Cash flows reported as financing activities include cash payments (outflows) to repay debt, purchase treasury stock, and pay dividends. Declarations of dividends are not reported on the statement of cash flows.
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________ refers to the knowledge that a representation is false.
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