Financial Accounting Unit 7

All of the following are ratios that measure profitability except:

Accounts receivable turnover ratio.

Which of the following statements is not accurate?

Additional investment in the company increases retained earnings.

Which of the following items are necessary and useful in providing greater insight into operations?

All of the above.

Which of the following financing activities would not be included in the statement of cash flows?

Asset exchanged for shares of stock.

All of the following would be considered operating cash flows except:

Cash dividends to stockholders.

Financing activities can be best described as:

Cash transactions associated with debt and equity financing activities.

Investing activities can be best described as:

Cash transactions that affect long term assets.

Which of the following operating activities would be included in the statement of cash flows?

Customer payments toward accounts receivables balance.

Liquidity can be best described as:

Having sufficient current assets to cover current liabilities.

All of the following would be considered investing activities except:

Issuance of bonds.

All of the following are examples non-cash items reported on the income statement that would not be included in operating activities on the statement of cash flows except:

Payments from customers toward account balances.

All of the following accurately describe horizontal analysis except:

Provides a result comparable to industry standards.

All of the following accurately describe vertical analysis except:

Provides a result comparable to industry standards.

The statement of cash flows achieves all of the following except...

Provides greater insight into which activities are generating profits.

Which of the following investing activities would not be included in the statement of cash flows?

Purchase of equipment on account.

All of the following would be considered financing activities except:

Purchasing stocks in another company.

All of the following accurately describe the balance sheet except...

Reflects profitability of operations.

Which of the following items would not be included in the statement of cash flows?

Sales on account.

All of the following accurately describe the indirect method of preparation except:

Shows specific cash flow data, such as cash received from customers, cash out to suppliers, etc...

Which of the following statements does not accurately discuss the relationship between the statement of cash flows and the balance sheet?

The balance sheet will show how cash was used, which is also shown in the statement of cash flows.

Solvency can be best described as:

The company's ability to pay its long term debt obligations.

Which of the following does not explain why net income from operating activities is not the same thing as net cash flow from operating activities?

The income statement does not include payments on long term liabilities.

Which of the following statements about the direct and indirect methods is not true?

They will produce a different net cash flow result.

All of the following accurately describe the direct method of preparation except:

Will not provide specific cash flow data such as cash from customers, cash out to suppliers, etc...

Which of the following does not accurately describe the income statement?

shows cash in from customers