Question 1

The net assets of a business are equal to

Accepted Answer

A) current assets minus current liabilities. 
B) total assets plus total liabilities. 
C) total assets minus total shareholders' equity. 
D) none of these choices are correct. 
A) current assets minus current liabilities. 
B) total assets plus total liabilities. 
C) total assets minus total shareholders' equity. 
D) none of these choices are correct. D

Question 2

A measure of a company's financial flexibility is

Accepted Answer

A) cash debt coverage. 
B) current cash debt coverage. 
C) free cash flow. 
D) cash debt coverage and free cash flow. 
A) cash debt coverage. 
B) current cash debt coverage. 
C) free cash flow. 
D) cash debt coverage and free cash flow. D

Question 3

Current cash debt coverage is often used to assess

Accepted Answer

A) financial flexibility. 
B) liquidity. 
C) profitability. 
D) solvency. 
A) financial flexibility. 
B) liquidity. 
C) profitability. 
D) solvency. B

Question 4

Caroline, Inc.had the following transactions during 2015:   What is Caroline, Inc.'s net cash provided (used) by investing activities?

Accepted Answer

A) $212,000 used by investing activities. 
B) $552,000 provided by investing activities. 
C) $372,000 used by investing activities. 
D) $392,000 provided by investing activities. 
A) $212,000 used by investing activities. 
B) $552,000 provided by investing activities. 
C) $372,000 used by investing activities. 
D) $392,000 provided by investing activities.

Question 5

The primary purpose of a statement of cash flows is to report the cash effects of operations during a period.

Accepted Answer

A) True 
 B)False

Question 6

Presented below are data for Antwerp Corp.   Equity at January 1, 2014 is

Accepted Answer

A) € 504. 
B) € 560. 
C) €1,220. 
D) €1,724. 
A) € 504. 
B) € 560. 
C) €1,220. 
D) €1,724.

Question 7

In preparing a statement of cash flows, sale of treasury stock at an amount greater than cost would be classified as a(n)

Accepted Answer

A) operating activity. 
B) financing activity. 
C) extraordinary activity. 
D) investing activity. 
A) operating activity. 
B) financing activity. 
C) extraordinary activity. 
D) investing activity.

Question 8

Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows?

Accepted Answer

A) Cash purchases of equipment. 
B) Cash purchases of bonds issued by another company. 
C) Cash received as repayment for funds loaned. 
D) Cash purchase of treasury stock. 
A) Cash purchases of equipment. 
B) Cash purchases of bonds issued by another company. 
C) Cash received as repayment for funds loaned. 
D) Cash purchase of treasury stock.

Question 9

Stine Corp.'s trial balance reflected the following account balances at December 31, 2015:   In Stine's December 31, 2015 statement of financial position, the current assets total is

Accepted Answer

A) R$101,000. 
B) R$92,000. 
C) R$87,000. 
D) R$83,000. 
A) R$101,000. 
B) R$92,000. 
C) R$87,000. 
D) R$83,000.

Question 10

An example of an item which is not an element of working capital is

Accepted Answer

A) accrued interest on notes receivable. 
B) goodwill. 
C) goods in process. 
D) short-term investments. 
A) accrued interest on notes receivable. 
B) goodwill. 
C) goods in process. 
D) short-term investments.

Question 11

Caroline, Inc.hired a new controller in late 2015.The controller has not prepared financial statements using IFRS before and needs your assistance.In compiling a complete set of financial statements under IFRS, which of the following components must be included?

Accepted Answer

A) A statement of financial position at the end of the period. 
B) Notes, including a summary of significant accounting policies. 
C) A statement of comprehensive income for the period. 
D) All of these choices are correct. 
A) A statement of financial position at the end of the period. 
B) Notes, including a summary of significant accounting policies. 
C) A statement of comprehensive income for the period. 
D) All of these choices are correct.

Question 12

Packard Corporation reports the following information:   Packard's cash debt coverage is

Accepted Answer

A) 1.10. 
B) 1.83. 
C) 2.75. 
D) 6.11. 
A) 1.10. 
B) 1.83. 
C) 2.75. 
D) 6.11.

Question 13

Under IFRS the payment of dividends may be reported as either an investing activity or a financing activity.

Accepted Answer

A) True 
 B)False

Question 14

Within the statement of financial position companies should separately report all of the following except

Accepted Answer

A) Assets and liabilities with different general liquidity characteristics. 
B) Assets and liabilities that have been financed with different types of instruments. 
C) Assets that differ in their expected function in the company's central operations. 
D) Liabilities that differ in their amounts, timing, and nature. 
A) Assets and liabilities with different general liquidity characteristics. 
B) Assets and liabilities that have been financed with different types of instruments. 
C) Assets that differ in their expected function in the company's central operations. 
D) Liabilities that differ in their amounts, timing, and nature.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Making and collecting loans and disposing of property, plant, and equipment are

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) liquidity activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) liquidity activities.

Question 17

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

Accepted Answer

A) operating activities. 
B) investing activities. 
C) financing activities. 
D) lending activities. 
A) operating activities. 
B) investing activities. 
C) financing activities. 
D) lending activities.

Question 18

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

Accepted Answer

A) True 
 B)False

Question 19

The current assets section of the statement of financial position should include

Accepted Answer

A) machinery. 
B) patents. 
C) goodwill. 
D) inventory. 
A) machinery. 
B) patents. 
C) goodwill. 
D) inventory.

Question 20

The financial statement which summarizes operating, investing, and financing activities of an entity for a period of time is the

Accepted Answer

A) retained earnings statement. 
B) income statement. 
C) statement of cash flows. 
D) statement of financial position. 
A) retained earnings statement. 
B) income statement. 
C) statement of cash flows. 
D) statement of financial position.

Exam 5: Statement of Financial Position and Statement of Cash Flows

The net assets of a business are equal to

A measure of a company's financial flexibility is

Current cash debt coverage is often used to assess

Caroline, Inc.had the following transactions during 2015: What is Caroline, Inc.'s net cash provided (used) by investing activities?

The primary purpose of a statement of cash flows is to report the cash effects of operations during a period.

Presented below are data for Antwerp Corp. Equity at January 1, 2014 is

In preparing a statement of cash flows, sale of treasury stock at an amount greater than cost would be classified as a(n)

Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows?

Stine Corp.'s trial balance reflected the following account balances at December 31, 2015: In Stine's December 31, 2015 statement of financial position, the current assets total is

An example of an item which is not an element of working capital is

Caroline, Inc.hired a new controller in late 2015.The controller has not prepared financial statements using IFRS before and needs your assistance.In compiling a complete set of financial statements under IFRS, which of the following components must be included?

Packard Corporation reports the following information: Packard's cash debt coverage is

Under IFRS the payment of dividends may be reported as either an investing activity or a financing activity.

Within the statement of financial position companies should separately report all of the following except

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

Making and collecting loans and disposing of property, plant, and equipment are

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

The current assets section of the statement of financial position should include

The financial statement which summarizes operating, investing, and financing activities of an entity for a period of time is the

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financialreporting

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