Reference no: EM132153881

QUESTION 1: Why is the statement of cash flows useful to the analyst?

a.It is a way of showing changes in the balance sheet accounts.

b.Focusing on net income can be misleading if a company has a healthy profit, but cannot translate the profit into cash.

c.The statement of cash flows reveals why a company was able to generate a profit.

d.Both (a) and (b).

QUESTION 2: The following items would be classified as operating activities on the statement of cash flows:

a.Delivering or producing goods for sale, services, and cash effects of transactions.

b.Acquisitions of equipment, payment of dividends, revenue.

c.Proceeds from borrowing, payments of dividends, purchases of supplies.

d.Payments on loans, payments for taxes, payments for rent.

QUESTION 3: Which of the following items would be classified as financing activities on the statement of cash flows:

a.Payments for inventory, payments to lenders, payments for taxes.

b.Proceeds from borrowing, payment of dividends, and repayment of debt.  

c.Loans to others, returns from loans to others, acquisition of land.

d.Sales of goods, repayment of debt, loans to others.

QUESTION 4: How would Accounts receivable be classified on the statement of cash flows?

a.Cash accounts.

b.Operating accounts.

c.Financing accounts.

d.Investing accounts.

QUESTION 5: How would Long-term debt be classified on the statement of cash flows?

A.Cash accounts.

B.Operating accounts.

C.Financing accounts

D. Investing accounts.

QUESTION 6: How would Accounts payable be classified on the statement of cash flows?

A.Cash accounts.

B. Operating accounts.

C. Financing accounts.

D. Investing accounts.

QUESTION 7: What is implied if the accounts payable account has decreased?

a.Cash flow from financing activities has decreased relative to net income.

b.Cash flow from operating activities has increased relative to net income.

c.Cash flow from operating activities has decreased relative to net income.

d.Cash flow from financing activities has increased relative to net income.

QUESTION 8: What impact does depreciation have on the cash account?

a.Depreciation has no impact on the cash account.

b. Depreciation results in a decrease to cash.

c.Depreciation results in an increase to cash.

d.Depreciation only impacts the cash account if inflation has occurred.