Chapter Quiz
1. When creating a statement of cash flows, where would you put the cash used to pay employee wages?
- cash from financing activities
- cash from operating activities (Cash from operating activities includes items such as wages and utility bills.)
- operating activities
- cash from investing activities
2. When reading Walmart's income statement, which item contains the money the company paid to buy the inventory that will be sold in their stores?
- sales
- cost of sales (The cost of sales is the money Walmart paid its suppliers for retail inventory)
- net income
- net income
3. If the owner of a company invests $1,000 in the company, how is that money recorded on a balance sheet?
- as an asset
- as equity (Equity represents money invested in a company by the owners or shareholders.)
- as revenue
- as a liability