Deck 12: Statement of Cash Flows

Question 1

Interest and dividends from investments held by a company are reported as cash inflows from investing activities on the statement of cash flows.Since interest and dividends from investments are reported as revenues on the income statement,they are reported as cash inflows from operating activities on the statement of cash flows.

Answer 1

False

Question 2

Using the indirect method,the increase in accumulated depreciation is added to net income in the operating section.The increase in accumulated depreciation could be due to a combination of depreciation expense and sales of property,plant,and equipment.Depreciation expense would be added to net income in the operating section.Sales of property,plant and equipment would be reported as a cash inflow in the investing section.

Answer 2

False

Question 3

Treasury stock purchases made with cash are cash outflows in the financing activities section of the statement of cash flows.Repurchases of stock made with cash are financing activities.

Answer 3

True

Question 4

Which of the following statements regarding the reporting of operating cash flows using the direct method is true?

A)Although most U.S.companies use the indirect method,the Financial Accounting Standards Board (FASB)prefers the direct method of accounting for cash flows from operating activities.
B)The FASB prefers the indirect method of calculating cash flows from operations because it gives a more accurate calculation of cash provided by operating activities.
C)The direct method results in a larger amount of cash flow from operating activities than does the indirect method.
D)The direct and indirect methods use different presentations for cash flows from investing and financing activities.

Question 5

Depreciation expense is not reported on the statement of cash flows when prepared using the direct method.The direct method converts revenues to cash inflows and expenses to cash outflows.Since depreciation is a noncash expense,it does not appear in the operating activities section of the statement of cash flows.

Question 6

Investing activities include receiving cash from selling land and any resulting gain or loss on the sale.Investing activities include cash received from selling land,but any gain or loss on the sale would be deducted from or added to net income in the operating section,if the indirect method is used.

Question 7

The reporting of financing activities is identical under the indirect and direct methods for the statement of cash flows.The choice between the direct and indirect methods affects only the operating activities section of the statement of cash flows,not the investing or financing activities sections.

Question 8

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.The statement of cash flows explains the change in cash and cash equivalents from operating,investing and financing activities.

Question 9

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.To convert net income to cash flows from operating activities,a decrease in accounts receivable means that sales revenue on the income statement is less than the amount of cash collected from customers;therefore,the decrease should be added to net income.

Question 10

If a company is to succeed over the long-term,a positive cash flow from operating activities is necessary.An established,healthy company has positive cash flows from operating activities which are sufficient to pay for replacement of current productive assets and provide additional cash flows for business growth.

Question 11

Using the T-account approach to preparing the statement of cash flows,an increase in accounts payable would appear on the debit side of the cash account.An increase in accounts payable indicates that purchases on account exceed payments on account,so cash would increase.

Question 12

When using the spreadsheet approach for preparing a Statement of Cash Flows using the indirect method,one half of the spreadsheet reflects changes in balance sheet accounts and the other half is used to demonstrate their effect on cash flows.The spreadsheet is organized with the balance sheet on the top and the adjustments that would appear on a statement of cash flows on the bottom.

Question 13

Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows.Significant investing and financing transactions that do not have cash flow effects must be reported in a supplementary schedule to the statement of cash flows.This schedule may be presented on the face of the statement or in the notes to the financial statements but this information is not part of the statement.

Question 14

When the net cash flows from operating,investing,and financing activities are combined to arrive at the overall net change in cash,a net decrease in cash is subtracted from the beginning cash balance to calculate the ending cash balance.The statement of cash flows explains the change in cash.If the change is positive,it is added to the beginning cash balance;if the change is negative,it is subtracted from the beginning cash balance to arrive at the ending cash balance.

Question 15

If a company uses the direct method of calculating cash flows from operating activities,it must adjust net income for gains or losses when selling property,plant,and equipment.A company must make adjustments for gains and losses only when the indirect method is used to present cash flows from operating activities.

Question 16

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added to net income.To convert net income to cash flows from operating activities,an increase in income taxes payable means that income tax expense on the income statement is greater than the amount of cash paid for income taxes;therefore,the increase should be added to net income.

Question 17

Under the indirect method,changes in current assets are used in determining cash flows from operating activities and changes in current liabilities are used in determining cash flows from financing activities.Both changes in current assets and current liabilities are used in determining cash flows from operating activities.

Question 18

If a company reports negative net cash flow from operating activities,positive net cash flow from investing activities,and zero net cash flow from financing activities,this suggests that the company is selling its productive assets to cover its operating activities outflows.Positive net cash flow from investing activities indicate sales of productive assets,and negative net cash flow from operating activities indicate a need for another source of cash to cover operating cash outflows.

Question 19

In general,the cash flow from operating activities is considered by many to be the most important component of the statement of cash flows.Most analysts believe the cash flows from operating activities section of the statement is the most important because,in the long run,operations are the only continuing source of cash.

Question 20

A gain or loss from selling equipment is reported under cash flows from operating activities using the direct method.The direct method converts revenues to cash inflows and expenses to cash outflows to arrive at net cash flow from operating activities.Since gains and losses are noncash amounts,they are not used in calculating operating cash flows using the direct method.

Question 21

The T-account approach

A)may be used with the direct method.
B)creates one big T-account for cash that replaces separate schedules to show all the changes in the cash account.
C)shows cash provided as credits and cash used as debits.
D)does not determine the change in each balance sheet account.

Question 22

Cash and cash equivalents include:

A)assets that have stable long-term value.
B)assets that are short-term,highly liquid,and are purchased by the entity within three months of maturity.
C)assets that consistently grow in value over the long run.
D)assets that are expected to be used up within a year.

Question 23

Which of the following statements regarding financing activities is not true?

A)Cash dividends paid to a company's stockholders are reported as cash outflows from financing activities.
B)When a company issues stock for cash,it reports a cash inflow from financing activities.
C)When a company repurchases stock with cash,it reports a cash outflow for financing activities.
D)When a company repays a loan,it reports a cash inflow from financing activities.

Question 24

The spreadsheet approach to preparing a statement of cash flows includes all of the following except:

A)a debit to intangible assets and a credit to cash flow from investing activities for the purchase of licensing rights.
B)a decrease in cash flow from operating activities if prepayments exceed amounts expensed.
C)an increase in cash flow from operating activities if more inventory is purchased than sold.
D)a credit to contributed capital and a debit to cash flow from investing activities for proceeds of a stock issuance.

Question 25

Suppose a company generally records revenues and expenses before receiving or making cash payments.Which of the following statements is not true?

A)If sales are falling,net losses could occur even though the company reports a net cash inflow from operating activities.
B)If sales are rising,net profits could occur even though the company reports a net cash outflow from operating activities.
C)Net income and cash flows will always agree because even though revenues and expenses can be recorded in different time periods than their related cash flows the differences will cancel out and the results will be the same.
D)When the indirect method is used,net cash flow from operating activities includes adjustments for non-cash expenses such as depreciation which would cause net cash from operating activities to be different from net income.

Question 26

Which of the following statements regarding calculation of cash flows from operating activities under the indirect method is true?

A)When the indirect method is used,changes in current liabilities are subtracted while changes in current assets are added to convert net income to net cash flow from operating activities.
B)When the indirect method is used,depreciation expense is added to net income as a step in the process of calculating net cash flow from operating activities.
C)When the indirect method is used,gains on the sale of property,plant and equipment are added to convert net income to net cash flow from operating activities.
D)When the indirect method is used,changes in long-term liabilities are subtracted to convert net income to net cash flow from operating activities.

Question 27

Which of the following is not needed to prepare a statement of cash flows?

A)Statement of retained earnings.
B)Comparative balance sheet.
C)Additional information on financing and investing activities.
D)Income statement.

Question 28

Which of the following statements regarding cash flows from investing activities is true?

A)The proceeds from sales of investments are reported as cash inflows from investing activities.
B)Cash flows from investing activities are calculated by making adjustments to net income.
C)Cash paid to acquire long-lived assets is reported as a cash inflow from investing activities.
D)Cash received from issuing a long-term payable is reported as a cash inflow from investing activities.

Question 29

Which of the following would be included in cash flows from financing activities?

A)Cash proceeds from sales.
B)Cash received from a sale of land.
C)Dividends paid to stockholders.
D)Cash used to purchases of equipment.

Question 30

When the indirect method is used,details from which of the following balance sheet accounts are used in calculating both operating and financing cash flows?

A)Bonds payable.
B)Taxes payable.
C)Retained earnings.
D)Contributed capital.

Question 31

Using the T-account approach:

A)Net income appears on the debit side of the cash account under operating activities.
B)Payment of long-term debt appears on the debit side of the cash account under financing activities.
C)Purchase of equipment appears on the credit side of the cash account under operating activities.
D)An increase in accounts receivable appears on the debit side of the cash account.

Question 32

Which of the following statements regarding the calculation of cash flows from operating activities under the direct method is true?

A)When the direct method is used,each revenue and expense account on the income statement is individually examined to calculate the cash flows from operating activities.
B)Noncash revenues and expenses must be included in cash flows from operating activities when preparing a statement of cash flows using the direct method.
C)Depreciation is reported as a cash inflow in the cash flows from operating activities when the direct method is used.
D)A loss on the sale of a long-term asset is subtracted in the cash flows from operating activities when the direct method is useD.The direct method converts revenues to cash receipts and expenses to cash disbursements in order to determine the net cash flow from operating activities.Noncash revenues and expenses,including gains and losses,are not used in the calculation of operating cash flows using the direct method.

Question 33

A company has positive cash flow from investing and financing activities,but negative cash flow from operating activities.The likely result is

A)investors may not buy the company's stock because dividends are unlikely.
B)investors will continue to buy stock since the company's growth prospects are good.
C)creditors will continue to lend money to the company.
D)creditors will demand immediate repayment of all outstanding debt.

Question 34

Which of the following would be included in cash flows from investing activities?

A)Cash proceeds from sales.
B)Cash received from an issuance of bonds.
C)Dividends paid to stockholders.
D)Cash used to purchases of equipment.

Question 35

The statement of cash flows cannot be used to determine

A)changes in working capital.
B)expenditures on long-term assets.
C)profitability as measured by specific revenues and expenses.
D)reliance on external financing.

Question 36

What is the first step in calculating cash flows from operations when the indirect method is used?

A)Find net income on the income statement.
B)Calculate the net change in the cash account.
C)Add the change in accounts receivable to sales revenue.
D)Identify the balance sheet accounts that relate to operating activities.

Question 37

Which of the following would be included in cash flows from operating activities?

A)Cash proceeds from sales.
B)Cash received from an issuance of bonds.
C)Dividends paid to stockholders.
D)Cash used for purchases of equipment.

Question 38

If the calculation of cash flows from operating activities starts with net income,the company:

A)is using the net income method.
B)will remove the effects of all noncash items included in the calculation of net income.
C)is using the direct method.
D)will add all noncash items not included in the calculation of net income.

Question 39

Cash flows from investing activities include cash:

A)inflows and outflows reflecting revenues and expenses.
B)outflows from the sale of long-term investments.
C)inflows from the sale of long-term investments.
D)inflows from the sale of a company's own stock to its stockholders.

Question 40

Cash flows from financing activities:

A)are always negative because the company pays dividends as well as interest and principal on debt.
B)includes all cash inflows and outflows between a company and its stockholders.
C)includes all cash inflows and outflows associated with a company's lending activities.
D)are always positive unless the company is experiencing serious financial trouble.

Question 41

Assume a company uses the direct method to prepare its statement of cash flows.If the company's accounts receivable increase during the accounting period,the change in accounts receivable is:

A)added to the change in the cash account to calculate cash collected from customers.
B)subtracted from sales revenue to calculate the cash collected from customers.
C)added to sales revenue to calculate the cash collected from customers.
D)subtracted from the change in the cash account to calculate cash collected from customers.

Question 42

Depreciation is added back to net income in a statement of cash flows prepared using the indirect method because it:

A)reduces net income but not cash.
B)is a cash inflow.
C)is a revenue.
D)is a valuation concept.

Question 43

Brighton,Inc. ,uses the indirect method to determine its net cash flows from operating activities.During the course of the year,the company's accounts receivable increased by $10,000 and its accounts payable decreased by $5,000.As a result of these two items,the calculation to determine cash flows from operating activities will be:

A)increased by $5,000.
B)decreased by $5,000.
C)increased by $15,000.
D)decreased by $15,000.

Question 44

Assume a company uses the indirect method to prepare its statement of cash flows.If inventory decreases and unearned revenue increases during an accounting period,what does the company do with the changes in these accounts to calculate cash flows from operating activities?

A)Both are added to net income.
B)The change in inventory is added to net income;the change in unearned revenue is subtracted.
C)Both are subtracted from net income.
D)The change in unearned revenue is added to net income;the change in inventory is subtracteD.Using the indirect method,both decreases in current assets and increases in current liabilities are added to net income to convert to cash flows from operating activities.

Question 45

When the direct method is used to determine the cash flows from operating activities,which of the following adjustments must be made to income tax expense to determine total income tax payments?

A)Add all changes in income taxes and income taxes payable.
B)Add decreases in income taxes payable and subtract increases in income taxes payable.
C)Add increases in income taxes payable and subtract decreases in income taxes payable.
D)Subtract all changes in income taxes payable.

Question 46

Consider the following information: The company would report net cash provided by operating activities of:

A)$17,500.
B)$18,500.
C)$21,500.
D)$23,300.

Question 47

Your company owned equipment with a book value of $120,000 that was sold during this accounting period for $30,500 in cash,and purchased new equipment for cash of $148,000.Your company would record:

A)a debit of $148,000 and a credit of $30,500 to the cash account for a net cash inflow of $117,500.
B)a debit of $148,000 and a credit of $89,500 to the cash account for a net cash inflow of $58,500.
C)a debit of $30,500 and a credit of $148,000 to the cash account for a net cash outflow of $117,500.
D)a debit of $89,500 and a credit of $148,000 to the cash account for a net cash outflow of $58,500.

Question 48

Assume a company uses the direct method to prepare its statement of cash flows.If the company's inventory and accounts payable both increase during the accounting period,how would these changes affect cash flow calculations?

A)The changes in each account are both added to net income.
B)The change in inventory is subtracted from cost of goods sold and the change in accounts payable is added to cost of goods sold to find the cash paid to suppliers.
C)The changes in each account are both subtracted from net income.
D)The change in inventory is added to cost of goods sold and the change in accounts payable is subtracted from cost of goods sold to find the cash paid to suppliers.

Question 49

Which of the following journal entries would have an effect on cash from operating activities?

A)Recording bad debts.
B)Recording depreciation.
C)Recording loss on sale of investment.
D)Recording cash paid for interest on long-term note payable.

Question 50

Which of the following would be reported as a cash outflow from investing activities?

A)Donating an old piece of equipment to charity.
B)Repaying the principal of a bond.
C)Buying another company's bonds with cash.
D)Paying for an investment asset by issuing company stock.

Question 51

When the indirect method is used,if accounts receivable increases during the accounting period,the change in accounts receivable is:

A)added to the change in the cash account.
B)subtracted from net income.
C)added to net income.
D)subtracted from the change in the cash account.

Question 52

If a company's sales revenue was $171,356 and cash collected from customers was $167,803,which of the following would be consistent with this difference?

A)Accounts receivable could have decreased.
B)Cash payments could have been larger than the expense accounts.
C)Accounts receivable could have increased.
D)Cash payments could have been smaller than the expense accounts.

Question 53

Cinno Company reported net income of $20,000 for the year ended December 31,2014.During the year,inventories decreased by $7,000,accounts payable decreased by $8,000,depreciation expense was $10,000,and accounts receivable increased by $6,500.Net cash provided by operations in 2014,computed using the indirect method was:

A)$10,500.
B)$22,500.
C)$38,500.
D)$51,500.

Question 54

Almost all U.S.companies have used the indirect method of preparing the statement of cash flows:

A)because most users of the financial statements do not understand the direct method.
B)in spite of the Financial Accounting Standard Board's stated preference for the direct method.
C)because it usually requires less space in the annual report.
D)so that stockholders cannot determine how much cash was spent on executives' salaries.

Question 55

When the indirect method is used,if prepaid expenses decrease during the accounting period,the change in prepaid expenses is:

A)added to the change in the cash account.
B)subtracted from net income.
C)added to net income.
D)subtracted from the change in the cash account.

Question 56

When a company uses the direct method to determine the cash flows from operating activities,cash flows from operating activities will:

A)be identical to the amount reported using the indirect method.
B)be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.
C)always be larger than the amount reported using the indirect method.
D)be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect methoD.The direct method and the indirect method produce the same result for net cash provided by or used in operating activities.

Question 57

When the direct method is used to determine the cash flows from operating activities,other operating expenses are converted into cash outflows by:

A)adding changes in prepaid expenses and accrued liabilities to other expenses.
B)subtracting increases in prepaid expenses and subtracting decreases in accrued liabilities from other expenses.
C)adding increases in prepaid expenses and adding decreases in accrued liabilities to other expenses.
D)subtracting changes in prepaid expenses and accrued liabilities from other expenses.

Question 58

When the direct method is used to determine the cash flows from operating activities,which of the following adjustments must be made to interest expense to determine total interest payments?

A)Add all changes in interest payable.
B)Add decreases in interest payable and subtract increases in interest payable.
C)Add increases in interest payable and subtract decreases in interest payable.
D)Subtract all changes in interest payable.

Question 59

Two years ago,your company bought $40,000 in bonds from another company.This month,it sold half of those bonds for $20,640 and lent $1,000 to an employee with a promissory note.On the statement of cash flows for this accounting period,your company would report a net cash:

A)outflow of $19,640 from investing activities.
B)inflow of $19,640 from investing activities.
C)inflow of $20,640 from investing activities.
D)outflow of $20,640 from investing activities.

Question 60

Assume a company uses the indirect method to prepare its statement of cash flows.If the supplies account increases and accounts payable decreases during an accounting period,what does the company do with the changes in these accounts to calculate cash flows from operating activities?

A)Both are added to net income.
B)The change in accounts payable is added to net income;the change in supplies is subtracted.
C)Both are subtracted from net income.
D)The change in supplies is added to net income;the change in accounts payable is subtracteD.Using the indirect method,both decreases in current assets and increases in current liabilities are added to net income to convert to cash flows from operating activities.

Question 61

Which of the following represent cash outflows from financing activities?

A)Distributing a stock dividend.
B)Paying a bond's face value at maturity.
C)Issuing long-term bonds at a discount.
D)Paying interest on promissory notes.

Question 62

An outdoor water park in the Midwestern states with a calendar year-end is likely to have:

A)unpredictable fluctuations in cash flow from quarter to quarter.
B)the largest cash inflow from operations in the second and third quarters (April - September).
C)a fairly stable cash flow across all four quarters.
D)the largest cash inflow from operations in the fourth and first quarters (October - March).

Question 63

Use the information above to answer the following question.The company would report net cash provided by (used in)financing activities of:

A)$(2,500).
B)$2,000.
C)$5,000.
D)$6,000.

Question 64

The advantages of the direct method include all of the following except:

A)It allows for more detailed analysis of operating cash flows.
B)It provides more information than the indirect method to relate cash inflows and outflows.
C)It allows for more reliable prediction of future cash flows.
D)Comparisons between companies are facilitated since most U.S.companies use the direct methoD.Most U.S.companies use the indirect method.

Question 65

A toy store with a calendar year-end is likely to have:

A)unpredictable fluctuations in cash flow from quarter to quarter.
B)the largest cash inflow from operations in the second and third quarters (April - September).
C)a fairly stable cash flow across all four quarters.
D)the largest cash inflow from operations in the fourth and first quarters (October - March).

Question 66

Which of the following statements is true?

A)GAAP classifies dividends paid as a financing activity,but IFRS allows them to be classified as either an operating or financing activity.
B)GAAP allows interest paid to be classified as either an operating or financing activity,but IFRS requires that it be classified as a financing activity.
C)GAAP classifies dividends received as an investing activity,but IFRS allows them to be classified as either an operating or investing activity.
D)GAAP classifies interest received as either an operating or investing activity,but IFRS requires it to be classified as an investing activity.

Question 67

A company purchases a $300,000 building,paying $200,000 in cash and signing a $100,000 promissory note.What will be reported on the statement of cash flows as a result of this transaction?

A)A $300,000 cash outflow from investing activities.
B)A $200,000 cash outflow from investing activities and a $100,000 cash inflow from financing activities.
C)A $200,000 cash outflow from investing activities and a $100,000 noncash transaction.
D)A $300,000 cash outflow from investing activities and a $100,000 cash inflow from financing activities.

Question 68

Cash flows from operating activities include all of the following except:

A)a purchase of land.
B)collections from customers on account.
C)payments to employees for hours worked.
D)receipt of dividends.

Question 69

A company issues $1 million of new stock and pays $200,000 in cash dividends during the year.In addition,the company took advantage of falling interest rates to borrow $1.5 million in a new bond issue and paid off existing bonds with a face value of $2 million.The company bought 500 of another company's $1,000 bonds at a $100,000 premium.The net cash flow from financing activities is:

A)An inflow of $500,000.
B)An outflow of $200,000.
C)An outflow of $100,000.
D)An inflow of $300,000.

Question 70

Cash flows from financing activities include all of the following except

A)payment of long-term debt.
B)interest expense.
C)proceeds from stock issuance.
D)dividends paid to stockholders.

Question 71

The net cash flow from operating activities is an inflow of $37,042,the net cash flow from investing activities is an outflow of $16,831,and the net cash flow from financing activities is an outflow of $26,397.If the beginning cash account balance is $11,283,what is the ending cash account balance?

A)$5,097
B)($6,186)
C)$38,759
D)$27,476

Question 72

Which of the following are used to determine cash flows from financing activities?

A)Short-term debt,accrued liabilities,contributed capital,and notes payable.
B)Long-term debt,contributed capital,and retained earnings.
C)Short-term debt,accrued liabilities,retained earnings,and bonds payable.
D)Long-term debt,notes payable,interest expense,and bonds payable.

Question 73

Free cash flow is a positive cash flow:

A)beyond what is needed to replace current property,plant,and equipment and pay dividends.
B)across all three activity components of the statement of cash flows.
C)beyond what has been allotted for future property,plant,and equipment replacement and expansion.
D)across both financing and investing activities.

Question 74

Which of the following represent cash provided by financing activities?

A)Issuing stock in exchange for another company's stock.
B)Paying a bond's face value at maturity.
C)Issuing long-term bonds at a discount.
D)Receiving interest on promissory notes.

Question 75

Cash transactions relating to the purchase and sale of which types of assets affect a company's cash flows from investing activities?

A)All of a company's assets.
B)All of a company's assets except inventory.
C)All of a company's non-current assets.
D)Only property,plant and equipment.

Question 76

The retained earnings account has a beginning balance of $321,975 and an ending balance of $356,413.Net income is $40,251.Which of the following statements is true?

A)$5,813 would be subtracted when determining cash flows from financing activities.
B)$40,251 would be added when determining cash flows from financing activities.
C)$34,438 would be added when determining cash flows from financing activities.
D)$321,975 would be added when determining cash flows from operating activities.

Question 77

Cash flows from investing activities include all of the following except:

A)a purchase of an automobile.
B)a sale of a trademark.
C)a purchase of stock of another company.
D)an issuance of bonds.

Question 78

Company X paid Company Y $1.35 million for a new plant.During the same accounting period,Company X experienced the following changes in its balance sheet: Cash decreased by $350,000,Accounts Receivable increased by $321,300,Inventory increased by $275,800,Property,Plant,and Equipment increased by $752,900,and Bonds Payable increased by $1 million.The net cash flow from financing activities is:

A)An inflow of $1.35 million.
B)An outflow of $350,000.
C)An inflow of $1 million.
D)An inflow of $752,900.

Question 79

Use the information above to answer the following question.The company would report net cash provided by (used in)investing activities of:

A)$(1,000).
B)$(2,000).
C)$5,000.
D)$7,000.

Question 80

Which of the following statements is true regarding cash flows from financing activities?

A)When companies borrow,cash outflows for financing activities have occurred.
B)When companies receive dividends,cash inflows from financing activities have occurred.
C)When companies repurchase their own stock,cash outflows for financing activities have occurred.
D)When companies pay dividends,cash inflows from financing activities have occurreD.Financing activities include issuing long-term debt (cash inflow),issuing stock (cash inflow),repurchasing their own stock (cash outflow),and paying dividends (cash outflow).A dividend received from investments is an operating activity,not a financing activity.