Question 1

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

Accepted Answer

A) True 
 B)False

Question 2

A supporting schedule to the statement of cash flows may include noncash flow items.

Accepted Answer

A) True 
 B)False

Question 3

Payment of cash dividends is an operating activity.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a typical cash flow under operating activities?

Accepted Answer

A) Cash inflows from sale of goods or services 
B) Cash inflows from interest 
C) Cash outflows to employees 
D) Cash outflows to suppliers 
E) Cash inflows from sale of property,plant,and equipment 
A) Cash inflows from sale of goods or services 
B) Cash inflows from interest 
C) Cash outflows to employees 
D) Cash outflows to suppliers 
E) Cash inflows from sale of property,plant,and equipment

Question 5

Cash flow per share is usually higher than earnings per share.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a typical cash flow under financing activities?

Accepted Answer

A) Cash inflow from sale of equity securities 
B) Cash inflow from sale of bonds 
C) Cash outflow for payment of dividends 
D) Cash outflow for loans to other entities 
E) Cash outflow for payment of amounts borrowed 
A) Cash inflow from sale of equity securities 
B) Cash inflow from sale of bonds 
C) Cash outflow for payment of dividends 
D) Cash outflow for loans to other entities 
E) Cash outflow for payment of amounts borrowed

Question 7

The operating cash flow/total debt ratio is one that indicates a firm's ability to meet its current maturities of debt.

Accepted Answer

A) True 
 B)False

Question 8

Working capital is considered to be one of the prime indicators of liquidity.

Accepted Answer

A) True 
 B)False

Question 9

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

Accepted Answer

A) True 
 B)False

Question 10

The purchase of equipment using cash is an investing activity.

Accepted Answer

A) True 
 B)False

Question 11

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

Accepted Answer

A) 
Supplemental schedule of noncash investing and financing activities 
B) Cash flows from operating activities 
C) Cash flows from investing activities 
D) Cash flows from financing activities 
E) Supplemental schedule to reconcile net income to net cash provided by operations 
A) 
Supplemental schedule of noncash investing and financing activities 
B) Cash flows from operating activities 
C) Cash flows from investing activities 
D) Cash flows from financing activities 
E) Supplemental schedule to reconcile net income to net cash provided by operations

Question 12

Which of the following is not a typical cash flow under investing activities?

Accepted Answer

A) Cash inflow from receipt of loans 
B) Cash inflow from sale of property,plant,and equipment 
C) Cash outflow for payment of amounts borrowed 
D) Cash outflow for loans to other entities 
E) Cash outflow for purchase of property,plant,and equipment 
A) Cash inflow from receipt of loans 
B) Cash inflow from sale of property,plant,and equipment 
C) Cash outflow for payment of amounts borrowed 
D) Cash outflow for loans to other entities 
E) Cash outflow for purchase of property,plant,and equipment

Question 13

The income statement does not fairly represent the cash from operations.

Accepted Answer

A) True 
 B)False

Question 14

Match the ratio that goes with each formula.
-$\frac {\text { Operating Cash Flow }} { \text { Current Maturities of Long-Term Debt and Current notes Payable} }$

Accepted Answer

A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends 
A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends

Question 15

The statement of cash flows became a required statement in which year?

Accepted Answer

A) 1995 
B) 1978 
C) 1971 
D) 1987 
E) 1993 
A) 1995 
B) 1978 
C) 1971 
D) 1987 
E) 1993

Question 16

Sale of equipment for cash is an operating activity.

Accepted Answer

A) True 
 B)False

Question 17

Match the ratio that goes with each formula.
-$\frac{\text { Operating Cash Flow }}{\text { Total Debt }}$

Accepted Answer

A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends 
A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends

Question 18

Match the ratio that goes with each formula.
-$\frac {\text {  Operating Cash Flow - Preferred Dividends }} { \text { Common Shares Outstanding} }$

Accepted Answer

A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends 
A) Operating cash flow/current maturities of long-term debt and current notes payable 
B) Operating cash flow/total debt 
C) Operating cash flow per share 
D) Operating cash flow/cash dividends

Question 19

MATCHING
Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows.
-Net loss

Accepted Answer

A) Operating 
B) Investing 
C) Financing 
D) Item would not appear 
A) Operating 
B) Investing 
C) Financing 
D) Item would not appear

Question 20

Which of the following should not be considered as part of "cash and cash equivalents"?

Accepted Answer

A) Cash on hand 
B) Cash on deposit 
C) Highly liquid investments 
D) Investments in short-term securities (<90 day maturity) 
E) Cash restricted for retirement of bonds 
A) Cash on hand 
B) Cash on deposit 
C) Highly liquid investments 
D) Investments in short-term securities (<90 day maturity) 
E) Cash restricted for retirement of bonds

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

A supporting schedule to the statement of cash flows may include noncash flow items.

Payment of cash dividends is an operating activity.

Which of the following is not a typical cash flow under operating activities?

Cash flow per share is usually higher than earnings per share.

Which of the following is not a typical cash flow under financing activities?

The operating cash flow/total debt ratio is one that indicates a firm's ability to meet its current maturities of debt.

Working capital is considered to be one of the prime indicators of liquidity.

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

The purchase of equipment using cash is an investing activity.

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

Which of the following is not a typical cash flow under investing activities?

The income statement does not fairly represent the cash from operations.

Match the ratio that goes with each formula. - $\frac {\text { Operating Cash Flow }} { \text { Current Maturities of Long-Term Debt and Current notes Payable} }$

The statement of cash flows became a required statement in which year?

Sale of equipment for cash is an operating activity.

Match the ratio that goes with each formula. - $\frac{\text { Operating Cash Flow }}{\text { Total Debt }}$

Match the ratio that goes with each formula. - $\frac {\text { Operating Cash Flow - Preferred Dividends }} { \text { Common Shares Outstanding} }$

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Net loss

Which of the following should not be considered as part of "cash and cash equivalents"?

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets;related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, utilities, oil and Gas, transportation, insurance, real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Exam 10: Statement of Cash Flows

The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

A supporting schedule to the statement of cash flows may include noncash flow items.

Payment of cash dividends is an operating activity.

Which of the following is not a typical cash flow under operating activities?

Cash flow per share is usually higher than earnings per share.

Which of the following is not a typical cash flow under financing activities?

The operating cash flow/total debt ratio is one that indicates a firm's ability to meet its current maturities of debt.

Working capital is considered to be one of the prime indicators of liquidity.

Cash flow per share is a better indication of a firm's ability to make capital expenditure decisions and pay dividends than is earnings per share.

The purchase of equipment using cash is an investing activity.

The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?

Which of the following is not a typical cash flow under investing activities?

The income statement does not fairly represent the cash from operations.

The statement of cash flows became a required statement in which year?

Sale of equipment for cash is an operating activity.

Match the ratio that goes with each formula. - Operating Cash Flow Total Debt \frac{\text { Operating Cash Flow }}{\text { Total Debt }} Total Debt Operating Cash Flow ​

Match the ratio that goes with each formula. - Operating Cash Flow - Preferred Dividends Common Shares Outstanding\frac {\text { Operating Cash Flow - Preferred Dividends }} { \text { Common Shares Outstanding} } Common Shares Outstanding Operating Cash Flow - Preferred Dividends ​

MATCHING Indicate whether each of the following would be under Operating,Investing,Financing,or whether the item would not appear on the statement of cash flows. -Net loss

Which of the following should not be considered as part of "cash and cash equivalents"?

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets;related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Expanded Analysis

Special Industries: Banks, utilities, oil and Gas, transportation, insurance, real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Match the ratio that goes with each formula. - $\frac{\text { Operating Cash Flow }}{\text { Total Debt }}$

Match the ratio that goes with each formula. - $\frac {\text { Operating Cash Flow - Preferred Dividends }} { \text { Common Shares Outstanding} }$