Exam 5: Balance Sheet and Statement of Cash Flows

One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility.Which of the following explanations is a description of financial flexibility?

In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for

Companies frequently describe the terms of all long-term liability agreements in notes to the financial statements.

The net assets of a business are equal to

The balance sheet omits many items that are of financial value to the business but cannot be recorded objectively.

Which of the following balance sheet classifications would normally require the greatest amount of supplementary disclosure?

Use the following information for questions The following trial balance of Scott Corp.at December 31, 2007 has been properly adjusted except for the income tax expense adjustment. Cash \ 75,000 Accounts receivable (net) 2,695,000 Inventory 2,085,000 Property, plant, and equipment (net) 7,366,000 Other financial data for the year ended December 31, 2007: -Included in accounts receivable is $1,200,000 due from a customer and payable in quarterly installments of $150,000.The last payment is due December 29, 2009. -The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $20,000 is classified as a current liability. -During the year, estimated tax payments of $525,000 were charged to income tax expense.The current and future tax rate on all types of income is 30%. In Scott's December 31, 2007 balance sheet, -The current liabilities total is