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Fundamental Accounting Principles

Business

Quiz 16 :

Reporting and Analyzing Cash Flows

Quiz 16 :

Reporting and Analyzing Cash Flows

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Under IFRS,the payment of cash dividends to shareholders can be classified as either a financing activity or operating activity.
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True False
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Answer:

True

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A purchase of land in exchange for shares is disclosed in a separate schedule attached to the statement of cash flows or in a note to the statement.
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True False
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Answer:

True

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Cash dividends and interest received can only be considered cash inflows from investing activities.
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True False
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Answer:

False

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Investments must be within 6 months of their maturity dates to be classified as cash equivalents.
True False
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The full disclosure principle requires that noncash investing and financing activities be disclosed in a separate schedule attached to the statement of cash flows,or in the accompanying notes.
True False
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The statement of cash flows only measures outflows of cash during a period.
True False
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On the statement of cash flows,business operations are classified as operating,investing,or financing activities.
True False
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Conversion of preferred shares to common shares is disclosed in the financing section of the statement of cash flows.
True False
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Many business decisions are based on cash flow evaluations.
True False
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Internal users of the statement of cash flows use cash flow information to plan day-to-day operating activities and make non-current investments.
True False
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The statement of cash flows helps financial statement users evaluate a company's earnings performance at a point in time.
True False
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Decisions on whether a company can pay its existing debts as they mature can be evaluated by looking at the company's statement of cash flows.
True False
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Financing activities include (a)the purchase and sale of non-current assets,(b)the purchase and sale of trading investments,and (c)lending and collecting on loans.
True False
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Noncash financing activities are disclosed in a note in the financing section of the statement of cash flows.
True False
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A noncash purchase of land is reported in the investing section of the statement of cash flows as a separate line item.
True False
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The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.
True False
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The purpose of the statement of cash flows is to report the major items comprising cash receipts and cash payments during a period.
True False
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Bank overdrafts repayable on demand may be included in the cash and cash equivalent balance.
True False
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Cash outflows to repurchase shares is an example of a cash flow from a financing activity.
True False
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Burton purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable.The entire transaction is disclosed to users on the statement of cash flows.
True False
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