Question 1

Which of the following items is treated as a cash equivalent?

Accepted Answer

A) Commercial paper with a 6-month maturity when purchased and 4 months until maturity at the balance sheet date. 
B) Investment in corporate stocks which management intends to sell within 3 months after the balance sheet date. 
C) Money market funds which can be obtained overnight from a bank or brokerage firm. 
D) Investments in corporate bonds which have 5 years until maturity when they are purchased. 
A) Commercial paper with a 6-month maturity when purchased and 4 months until maturity at the balance sheet date. 
B) Investment in corporate stocks which management intends to sell within 3 months after the balance sheet date. 
C) Money market funds which can be obtained overnight from a bank or brokerage firm. 
D) Investments in corporate bonds which have 5 years until maturity when they are purchased.

Question 2

The cash flow adequacy ratio can only be calculated if a company uses the direct method to report cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 3

Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2012:   Which method of preparing the operating activities section has Golden Consulting used?

Accepted Answer

A) The direct method. 
B) The indirect method. 
C) Either method. 
D) Cannot be determined without further information. 
A) The direct method. 
B) The indirect method. 
C) Either method. 
D) Cannot be determined without further information.

Question 4

Cash flows from borrowing and paying off a 90-day bank loan are classified as

Accepted Answer

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

Question 5

Which of the following measures can be used to evaluate a company's ability to meet future debt obligations after paying income taxes and interest and making capital expenditures?

Accepted Answer

A) Earnings per share 
B) Net income 
C) Cash flow adequacy ratio 
D) Net increase or decrease in cash and cash equivalents 
A) Earnings per share 
B) Net income 
C) Cash flow adequacy ratio 
D) Net increase or decrease in cash and cash equivalents

Question 6

Monticello Company reported the following information in its annual report for 2012.   What is the cash flow adequacy ratio for 2012 for Monticello Company?

Accepted Answer

A) 0.38 
B) 1.50 
C) 1.88 
D) 7.50 
A) 0.38 
B) 1.50 
C) 1.88 
D) 7.50

Which of the following items is treated as a cash equivalent?

The cash flow adequacy ratio can only be calculated if a company uses the direct method to report cash flows from operating activities.

Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2012: Which method of preparing the operating activities section has Golden Consulting used?

Cash flows from borrowing and paying off a 90-day bank loan are classified as

Which of the following measures can be used to evaluate a company's ability to meet future debt obligations after paying income taxes and interest and making capital expenditures?

Monticello Company reported the following information in its annual report for 2012. What is the cash flow adequacy ratio for 2012 for Monticello Company?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

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Exam 12: The Statement of Cash Flows

Which of the following items is treated as a cash equivalent?

The cash flow adequacy ratio can only be calculated if a company uses the direct method to report cash flows from operating activities.

Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2012: Which method of preparing the operating activities section has Golden Consulting used?

Cash flows from borrowing and paying off a 90-day bank loan are classified as

Which of the following measures can be used to evaluate a company's ability to meet future debt obligations after paying income taxes and interest and making capital expenditures?

Monticello Company reported the following information in its annual report for 2012. What is the cash flow adequacy ratio for 2012 for Monticello Company?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

Financial Statement Analysis

International Financial Reporting Standards

Filters