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11 a statement of cash flows a may be combined with the income statement at the opti 4298077


11) A statement of cash flows:

A) may be combined with the income statement at the option of management.

B) is typically prepared at the request of major creditors.

C) is a basic financial statement required for publicly-held companies.

D) may be combined with the balance sheet.

12) The statement of cash flows:

A) can be prepared instead of an income statement.

B) must be prepared daily.

C) summarizes the operating, financing, and investing activities of an entity.

D) is part of the income statement.

13) The financial statement that reports cash receipts and cash payments classified according to the company's major activities of operating, investing, and financing is the:

A) income statement.

B) balance sheet.

C) statement of cash flows.

D) statement of operating activities.

14) The main purpose of the statement of cash flows is to:

A) provide information about the cash receipts and cash payments during a period.

B) provide information about the investing and financing activities during a period.

C) prove that revenues exceed expenses if there is a net income.

D) assist banking relationships.

15) A statement of cash flows accomplishes all of the following EXCEPT:

A) determines the ability of the company to pay dividends and interest.

B) provides information about the cash receipts and cash payments during a period.

C) determines whether revenues equal expenses.

D) predicts future cash flows.

16) If a company reports a net loss, it:

A) cannot pay cash dividends.

B) cannot obtain a loan.

C) cannot purchase property.

D) may still have an increase in cash.

17) Highly liquid short-term investments that are easily convertible into cash are called:

A) trading securities.

B) cash equivalents.

C) current assets.

D) accounts receivable.

18) In addition to preparing the income statement, balance sheet, and statement of retained earnings, which of the following is also a required financial statement?

A) Statement of Cash Inflows and Outflows

B) Statement of Cash Flows

C) Cash Reserve Statement

D) Cash Reconciliation Statement

19) Creditors analyze the statement of cash flows to determine:

A) total interest earned during the period.

B) the quality of the company's earnings.

C) whether or not the company can pay interest on debt.

D) if management was overpaid.

20) The statement of cash flows will NOT report:

A) the number of checks not written at the end of the period.

B) how cash was used in the current period.

C) changes in the cash balance for the current period.

D) the sources of cash in the current period.

21) Which of the following is considered to be a cash equivalent?

A) Investments in short-term U.S. Government securities

B) Accounts receivable

C) Notes receivable

D) Trading securities

22) Which of the following does NOT apply to cash equivalents?

A) Highly-liquid

B) Readily convertible into cash

C) Short-term

D) Fluctuates with the market interest rate

23) The statement of cash flows is designed to fulfill all the following purposes EXCEPT to:

A) show the relationship of net income to changes in the company's cash.

B) assess the collectability of accounts receivable.

C) evaluate management decisions.

D) help predict future cash flows.

24) The best gauge of a company's ability to produce ample cash to continue as a going concern is net cash provided by:

A) operating activities.

B) investing activities.

C) financing activities.

D) analytical activities.

25) Cash equivalents do NOT include:

A) treasury bills.

B) money market funds.

C) 4-year certificates of deposit.

D) short-term corporate notes.



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