6. Financial Analysis and Interpretation

Cash Flow Statements — Quiz

Test your understanding of cash flow statements with 5 practice questions.

Practice Questions

Question 1

When preparing a cash flow statement using the indirect method, how is an increase in deferred tax liabilities treated?

Question 2

A company reports net income of $150,000$. It also has amortization expense of $10,000$ and a decrease in prepaid expenses of $5,000$. What is the cash flow from operating activities using the indirect method?

Question 3

Which of the following describes the treatment of a loss on the sale of an asset in the operating activities section of a cash flow statement using the indirect method?

Question 4

A company purchases a patent for cash. This transaction would be classified as a:

Question 5

Which of the following is an example of a cash inflow from financing activities?