Question 1

The current cash debt coverage ratio is often used to assess

Accepted Answer

A)  financial flexibility. 
B)  solvency. 
C)  liquidity. 
D)  profitability. 
A)  financial flexibility. 
B)  solvency. 
C)  liquidity. 
D)  profitability.

Question 2

Statement of cash Flows - indirect method
Use the information provided in Pr. 5-113. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020 using the indirect method.

Accepted Answer

The answer of  Statement of cash Flows - indirect...

Question 3

The current assets section of the balance sheet should include

Accepted Answer

A)  machinery. 
B)  patents. 
C)  goodwill. 
D)  inventory. 
A)  machinery. 
B)  patents. 
C)  goodwill. 
D)  inventory.

Question 4

Making and collecting loans and disposing of property, plant, and equipment are

Accepted Answer

A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  liquidity activities. 
A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  liquidity activities.

Question 5

The shareholders' equity section is usually divided into which four parts?

Accepted Answer

A)  preferred shares, common shares, retained earnings, contributed surplus 
B)  preferred shares, common shares, retained earnings, other comprehensive income 
C)  capital shares, contributed surplus, retained earnings, accumulated other comprehensive income 
D)  capital shares, appropriated retained earnings, unappropriated retained earnings, contributed surplus 
A)  preferred shares, common shares, retained earnings, contributed surplus 
B)  preferred shares, common shares, retained earnings, other comprehensive income 
C)  capital shares, contributed surplus, retained earnings, accumulated other comprehensive income 
D)  capital shares, appropriated retained earnings, unappropriated retained earnings, contributed surplus

Question 6

Equity or debt securities held to finance future construction of additional plants should be classified on a statement of financial position as

Accepted Answer

A)  current assets. 
B)  property, plant, and equipment. 
C)  non-current investments. 
D)  intangible assets. 
A)  current assets. 
B)  property, plant, and equipment. 
C)  non-current investments. 
D)  intangible assets.

Question 7

Creditworthiness; debt to total assets
Explain why a high debt to total assets ratio means a company has a higher risk of bankruptcy.

Accepted Answer

The debt to total assets ratio is a cove

Question 8

The statement of financial position is useful for analyzing all of the following EXCEPT

Accepted Answer

A)  liquidity. 
B)  solvency. 
C)  profitability. 
D)  financial flexibility. 
A)  liquidity. 
B)  solvency. 
C)  profitability. 
D)  financial flexibility.

Question 9

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

Accepted Answer

A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  lending activities. 
A)  operating activities. 
B)  investing activities. 
C)  financing activities. 
D)  lending activities.

Question 10

Cash flows from operating activities – direct method

Carla Limited had the following financial statements:

Additional information:
•	Equipment that cost $8,000 was sold for the carrying amount of $3,750. 
•	Dividends declared and paid were $10,000.  
Prepare the operating activities section of a statement of cash flows using the direct method.

Accepted Answer

The answer of Cash flows from operating activities – direct...

Question 11

Ending cash balance
Caldwell Corporation reports:
 $\begin{array}{llcc}
  \text {Cash provided by operating activities..................................  } & \$280,000 \
 \text {Cash used by investing activities..........................................  } &110,000\
 \text { Cash provided by financing activities................................... } &140,000\
 \text { Beginning cash balance......................................................... } &70,000\
\end{array}$
 What is Caldwell's ending cash balance?

Accepted Answer

Caldwell's ending cash balance

Question 12

The statement of financial position is useful for all of the following EXCEPT

Accepted Answer

A)  assessing a company's risk. 
B)  evaluating a company's liquidity. 
C)  evaluating a company's financial flexibility. 
D)  determining free cash flows. 
A)  assessing a company's risk. 
B)  evaluating a company's liquidity. 
C)  evaluating a company's financial flexibility. 
D)  determining free cash flows.

Question 13

An example of an item which is NOT an element of working capital is

Accepted Answer

A)  accrued interest on notes receivable. 
B)  goodwill. 
C)  inventory. 
D)  short-term investments. 
A)  accrued interest on notes receivable. 
B)  goodwill. 
C)  inventory. 
D)  short-term investments.

Question 14

Which of the following should NOT be considered current assets in the statement of financial position?

Accepted Answer

A)  instalment notes receivable due over eighteen months, in accordance with normal trade practice 
B)  prepaid taxes, which cover assessments for the current year 
C)  equity or debt securities purchased with cash available for current operations 
D)  franchises and copyrights 
A)  instalment notes receivable due over eighteen months, in accordance with normal trade practice 
B)  prepaid taxes, which cover assessments for the current year 
C)  equity or debt securities purchased with cash available for current operations 
D)  franchises and copyrights

Question 15

Which of the following should be EXCLUDED from long-term liabilities?

Accepted Answer

A)  derivatives 
B)  employee future benefits obligations 
C)  long-term liabilities maturing within the operating cycle, but will be paid from a sinking fund 
D)  bonds payable maturing in five years 
A)  derivatives 
B)  employee future benefits obligations 
C)  long-term liabilities maturing within the operating cycle, but will be paid from a sinking fund 
D)  bonds payable maturing in five years

Question 16

Ratios that measure how effectively an entity is using is assets are called

Accepted Answer

A)  liquidity ratios. 
B)  activity ratios. 
C)  solvency ratios. 
D)  profitability ratios. 
A)  liquidity ratios. 
B)  activity ratios. 
C)  solvency ratios. 
D)  profitability ratios.

Question 17

Definitions
Provide clear, concise answers for the following:
1. Explain the merits of classified financial statements.
2. What are financial instruments?
3. What are inventories?
4. What are other assets?
5. What statement of financial position information requires supplemental disclosure?
6. Explain the purpose of the statement of cash flows.
7. Explain the concept of free cash flow.

Accepted Answer

1. Classification of financial statement

Question 18

The IASB issued a new "Conceptual Framework for Financial Reporting" in March 2018 that included changes to the definitions of assets and liabilities. For most assets and liabilities, applying the new definition

Accepted Answer

A)  yields the same accounting results as the previous definitions. 
B)  results in more conservative reporting of assets, and more aggressive reporting of liabilities. 
C)  results in more aggressive reporting of assets and more conservative reporting of liabilities. 
D)  results in more conservative reporting of both assets and liabilities. 
A)  yields the same accounting results as the previous definitions. 
B)  results in more conservative reporting of assets, and more aggressive reporting of liabilities. 
C)  results in more aggressive reporting of assets and more conservative reporting of liabilities. 
D)  results in more conservative reporting of both assets and liabilities.

Question 19

Which of the following items would require special disclosure under IFRS?

Accepted Answer

A)  investment property only 
B)  biological assets and investment property only 
C)  provisions and biological assets 
D)  biological assets, investment property and provisions 
A)  investment property only 
B)  biological assets and investment property only 
C)  provisions and biological assets 
D)  biological assets, investment property and provisions

Question 20

Net sales divided by average total assets is called

Accepted Answer

A)  inventory turnover. 
B)  receivables turnover. 
C)  rate of return on assets. 
D)  asset turnover. 
A)  inventory turnover. 
B)  receivables turnover. 
C)  rate of return on assets. 
D)  asset turnover.

The current cash debt coverage ratio is often used to assess

Statement of cash Flows - indirect method Use the information provided in Pr. 5-113. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020 using the indirect method.

The current assets section of the balance sheet should include

Making and collecting loans and disposing of property, plant, and equipment are

The shareholders' equity section is usually divided into which four parts?

Equity or debt securities held to finance future construction of additional plants should be classified on a statement of financial position as

Creditworthiness; debt to total assets Explain why a high debt to total assets ratio means a company has a higher risk of bankruptcy.

The statement of financial position is useful for analyzing all of the following EXCEPT

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

The statement of financial position is useful for all of the following EXCEPT

An example of an item which is NOT an element of working capital is

Which of the following should NOT be considered current assets in the statement of financial position?

Which of the following should be EXCLUDED from long-term liabilities?

Ratios that measure how effectively an entity is using is assets are called

The IASB issued a new "Conceptual Framework for Financial Reporting" in March 2018 that included changes to the definitions of assets and liabilities. For most assets and liabilities, applying the new definition

Which of the following items would require special disclosure under IFRS?

Net sales divided by average total assets is called

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

Measurement

Reporting Financial Performance

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Accounting Information Systems and Adjusting Entries: A Comprehensive Guide

Filters

Exam 5: Financial Position and Cash Flows

The current cash debt coverage ratio is often used to assess

Statement of cash Flows - indirect method Use the information provided in Pr. 5-113. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020 using the indirect method.

The current assets section of the balance sheet should include

Making and collecting loans and disposing of property, plant, and equipment are

The shareholders' equity section is usually divided into which four parts?

Equity or debt securities held to finance future construction of additional plants should be classified on a statement of financial position as

Creditworthiness; debt to total assets Explain why a high debt to total assets ratio means a company has a higher risk of bankruptcy.

The statement of financial position is useful for analyzing all of the following EXCEPT

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

The statement of financial position is useful for all of the following EXCEPT

An example of an item which is NOT an element of working capital is

Which of the following should NOT be considered current assets in the statement of financial position?

Which of the following should be EXCLUDED from long-term liabilities?

Ratios that measure how effectively an entity is using is assets are called

The IASB issued a new "Conceptual Framework for Financial Reporting" in March 2018 that included changes to the definitions of assets and liabilities. For most assets and liabilities, applying the new definition

Which of the following items would require special disclosure under IFRS?

Net sales divided by average total assets is called

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

Measurement

Reporting Financial Performance

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Accounting Information Systems and Adjusting Entries: A Comprehensive Guide

Filters