= the money supply, BR = reserves of commercial banks (depository institutions), C = currency held by the nonbank public, and a = the money multiplier, then:   a. Ms = aBR + C b. Ms = a(BR + C) c. BR = Ms - C d. aC = Ms - BR

Th e statement of cash fl ows presents the fl ows into which three groups of business activities? A . Operating, Nonoperating, and Financing.

7. An increase in accounts payable represents an increase in net cash provided by operating activities just like borrowing money from a bank. An increase in accounts payable has an effect similar to taking out a new bank loan. However, these two items show up in different sections of the statement of cash flows to reflect the difference between operating and financing activities. a. True b. False If your answer is false, what is the correct answer:

Problem 11-1A (Static) Determine proper classification (LO11-1) Listed below are several transactions. For each transaction, indicate whether the cash effect of each transaction is reported in a statement of cash flows as an operating, investing, financing, or noncash activity. Also, indicate whether the transaction is a cash inflow or cash outflow, or has no effect on cash. The first answer is provided as an example. Transaction 1. Payment of employee salaries. 2. Sale of land for cash. 3. Purchase of rent in advance. 4. Collection of an account receivable. 5. Issuance of common stock. 6. Purchase of inventory. 7. Collection of notes receivable. 8. Payment of income taxes. 9. Sale of equipment for a note receivable. 10. Issuance of bonds. 11. Loan to another company. 12. Payment of a long-term note payable. 13. Purchase of treasury stock. 14. Payment of an account payable. 15. Sale of equipment for cash. Type of Activity Operating Cash Inflow or Outflow Cash outflow