16CSO: 1A1d LOS: 1A1c
　　The most commonly used method for calculating and reporting a company’s net cash flow from operating activities on its statement of cash flows is thea. direct method.
　　b. indirect method.
　　c. single-step method.
　　d. multiple-step method.
　　17. CSO: 1A1d LOS: 1A1c
　　The presentation of the major classes of operating cash receipts (such as receipts from customers) less the major classes of operating cash disbursements (such as cash paid for merchandise) is best described as thea. direct method of calculating net cash provided or used by operating activities.
　　b. cash method of determining income in conformity with generally accepted accounting principles.
　　c. format of the statement of cash flows.
　　d. indirect method of calculating net cash provided or used by operating activities.
　　6
　　18. CSO: 1A1a LOS: 1A1e
　　When a fixed asset is sold for less than book value, which one of the following will decrease?
　　a. Total current assets.
　　b. Current ratio.
　　c. Net profit.
　　d. Net working capital.
　　19. CSO: 1A1a LOS: 1A1e
　　Stanford Company leased some special-purpose equipment from Vincent Inc. under a long-term lease that was treated as an operating lease by Stanford. After the financial statements for the year had been issued, it was discovered that the lease should have been treated as a capital lease by Stanford. All of the following measures relating to Stanford would be affected by this discovery except thea. debt/equity ratio.
　　b. accounts receivable turnover.
　　c. fixed asset turnover.
　　d. net income percentage.
　　20. CSO: 1A1d LOS: 1A1e
　　Larry Mitchell, Bailey Company’s controller, is gathering data for the Statement of Cash Flows for the most recent year end. Mitchell is planning to use the direct method to prepare this statement, and has made the following list of cash inflows for the period.
　　Collections of $100,000 for goods sold to customers.
　　Securities purchased for investment purposes with an original cost of $100,000 sold for $125,000.
　　Proceeds from the issuance of additional company stock totaling $10,000.
　　The correct amount to be shown as cash inflows from operating activities isa. $100,000.
　　b. $135,000.
　　c. $225,000.
　　d. $235,000.