Which of the following is a cash flow from operating activities? a

1. Which of the following is a cash flow from operating activities?
   a. Sale of long-term investments in common stock.
   b. Purchase of merchandise for resale.
   c. Payment of a note payable.
   d. Sale of a piece of land no longer used in operations.

Purchase of merchandise for resale.

2. A cash inflow from financing activities includes:
   a. receipt of interest payments.
   b. proceeds from selling equipment.
   c. proceeds from issuance of bonds payable.
   d. proceeds from selling investments in equity securities of another company.

proceeds from issuance of bonds payable.

3. Which of the following statements about the statement of cash flows is correct?
   a. A purchase of equipment is classified as a cash inflow from investing activities.
   b. Cash dividends paid are classified as cash flows from operating activities.
   c. Cash dividends received on stock investments are classified as cash flows from operating activities.
   d. A company with a net loss on the income statement will always have a net cash outflow from operating activities.

Cash dividends received on stock investments are classified as cash flows from operating activities.

4. Which statement is false regarding the preparation of the indirect method of the statement of cash flows?
   a. An increase in merchandise inventory is subtracted from net income.
   b. Depreciation expense is added to net income.
   c. An increase in accounts receivable is added to net income.
   d. An increase in accounts payable is added to net income.

An increase in accounts receivable is added to net income.

5. Which of the following statements is true?
   a. A cash dividend is an operating cash outflow.
   b. Cash paid to repurchase treasury stock is an investing cash outflow.
   c. Cash paid to acquire stock in another company is a financing outflow.
   d. Purchase of a patent is an investing cash outflow.

Purchase of a patent is an investing cash outflow.

6. Which of the following statements is false?
   a. Purchase of equipment is an investing cash outflow.
   b. Sale of equipment creates investing cash outflow equal to its selling price.
   c. Purchase of short-term investments is an investing cash outflow.
   d. Purchase of a patent is an investing cash outflow.

Sale of equipment creates investing cash outflow equal to its selling price.