FIN3403 Chapter 3 (exam 1)

E. Sales.

A common-size income statement is an accounting statement that expresses all of a firm's expenses as a percentage of: A. Total assets. B. Total equity. C. Net income. D. Taxable income. E. Sales.

A. Decrease; operating.

According to the statement of cash flows, an increase in interest expense will _____ the cash flow from _____ activities. A. Decrease; operating. B. Decrease; financing. C. Increase; operating. D. Increase; financing. E. Increase; investment.

C. Decrease; operating.

According to the statement of cash flows, an increase in inventory will _____ the cash flow from _____ activities. A. Increase; operating. B. Decrease; financing. C. Decrease; operating. D. Increase; financing. E. Increase; investment.

B. Uses of cash.

Activities of a firm that require the spending of cash are known as: A. Sources of cash. B. Uses of cash. C. Cash collections. D. Cash receipts. E. Cash on hand.

D. Increase in common stock.

Which one of the following is a source of cash for a non-tax-paying firm? A. Increase in accounts receivable. B. Increase in depreciation. C. Decrease in accounts payable. D. Increase in common stock. E. Increase in inventory.

E. Decrease in inventory,

Which one of the following is a source of cash? A. Increase in accounts receivable, B. Decrease in common stock, C. Increase in fixed assets, D. Decrease in accounts payable, E. Decrease in inventory,

B. Acquisition of debt,

Which one of the following is a source of cash? A. Repurchase of common stock, B. Acquisition of debt, C. Purchase of inventory, D. Payment to a supplier, E. Granting credit to a customer,

E. Decrease in accounts payable

Which one of the following is a use of cash? A. Decrease in fixed assets. B. Decrease in inventory. C. Increase in long-term debt. D. Decrease in accounts receivables. E. Decrease in accounts payable.

C. Common-base year statement.

Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a chosen point in time? A. Statement of standardization. B. Statement of cash flows. C. Common-base year statement. D. Common-size statement. E. Base reconciliation statement.

D. Statement of cash flows.

The sources and uses of cash over a stated period of time are reflected on the: A. Income statement. B. Balance sheet. C. Tax reconciliation statement. D. Statement of cash flows. E. Statement of operating position.

A. I and IV only.

On the statement of cash flows, which of the following are considered financing activities? I. Increase in long-term debt. II. Decrease in accounts payable. III. Interest paid. IV. Dividends paid. A. I and IV only. B. III and IV only. C. II and III only. D. I, III, and IV only. E. I, II, III, and IV.

C. I, II, and III only.

On the statement of cash flows, which of the following are considered operating activities? I. Costs of goods sold. II. Decrease in accounts payable. III. Interest paid. IV. Dividends paid. A. I and III only. B. III and IV only. C. I, II and III only. D. I, III, and IV only. E. I, II, III, and IV.