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Financial Accounting Study Set 21

Business

Quiz 5 :

The Statement of Cash Flows

Quiz 5 :

The Statement of Cash Flows

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A company can only analyze its operations properly provided it has all detailed financial statements.
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True False
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True

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The Statement of Cash Flows provides a perspective of an organization's performance by highlighting the results in the net change in its cash position during the year.
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True False
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True

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The components of a Statement of Cash Flows are investing,financing,and operating activities.
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True False
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True

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All companies must present operating activities first on the statement of cash flows.
True False
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The Statement of Cash Flows and the Statement of Income both measure a company's performance.
True False
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The most common type of non-cash item is depreciation expense.
True False
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A positive cash flow from operating activities indicates that a company's financing activities are generating more cash than required for operations.
True False
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In the early part of the cash-to-cash cycle,net cash flows are normally inflows.
True False
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The Statement of Income reflects the overall change in cash flows for an accounting period.
True False
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Cash from operating activities will be the same using either the direct or indirect method to prepare the Statement of Cash Flows.
True False
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Companies can raise an unlimited amount of cash from financing activities as long as they are willing to pay higher interest rates.
True False
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Cash paid for dividends to shareholders is classified as an investing activity.
True False
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Accounting standard setters have established three acceptable methods for preparing a Statement of Cash Flows.
True False
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If a company has used a line of credit,then the amount of the borrowing can be considered "positive cash".
True False
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If prepaid expenses are shown as having a positive effect on cash flow,it is because prepaid expenses increased during the year.
True False
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Cash equivalents include investments that can be readily converted into cash;investment maturity dates are irrelevant.
True False
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The Statement of Cash Flows and Statement of Income are both important measurements of long-term profitability.
True False
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Non-cash expenses will reduce the amount of cash a company is able to generate from its operations.
True False
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The cash position of a company takes into consideration cash and cash equivalents.
True False
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The direct method is also known as the reconciliation method.
True False
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