Question 1

APB Opinion No. 19 permitted fund balance accounts in the statement of changes in financial position to include which of the following?

Accepted Answer

A) Quick assets only 
B) Cash and near cash only 
C) Working capital only 
D) Cash, cash and near cash, quick assets, or working capital 
A) Quick assets only 
B) Cash and near cash only 
C) Working capital only 
D) Cash, cash and near cash, quick assets, or working capital D

Question 2

Which of the following is a true statement?

Accepted Answer

A) Research is supportive of the contention that cash and funds flow data are informative above and beyond accrual data. 
B) Use of the direct method in the cash flow statement frequently results in non-articulation. 
C) Interest expense and long-term notes payable both appear in the financing section of the cash flow statement. 
D) With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach. 
A) Research is supportive of the contention that cash and funds flow data are informative above and beyond accrual data. 
B) Use of the direct method in the cash flow statement frequently results in non-articulation. 
C) Interest expense and long-term notes payable both appear in the financing section of the cash flow statement. 
D) With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach. A

Question 3

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting:

Accepted Answer

A) the fund balance and other accounts. 
B) cash and other accounts. 
C) current assets or liabilities and other accounts. 
D) liquid assets and other accounts. 
A) the fund balance and other accounts. 
B) cash and other accounts. 
C) current assets or liabilities and other accounts. 
D) liquid assets and other accounts. A

Question 4

An exit-price accounting system provides an estimate of the cash conversion value of a firm's resources.

Accepted Answer

A) True 
 B)False

Question 5

For capital leases, the interest portion is classified as an operating activity, whereas the reduction of principal portion is a financing activity.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true about the Statement of Cash Flows (SCF)?

Accepted Answer

A) The SCF is more subject to manipulation than the income statement. 
B) Cash flow from financing activities is considered to be the most important part of the SCF. 
C) Classification rules prevent manipulation of cash flows from operating activities on the SCF. 
D) Flexibility in applying classification rules on the SCF allows companies in the same industry to give vastly different perspectives. 
A) The SCF is more subject to manipulation than the income statement. 
B) Cash flow from financing activities is considered to be the most important part of the SCF. 
C) Classification rules prevent manipulation of cash flows from operating activities on the SCF. 
D) Flexibility in applying classification rules on the SCF allows companies in the same industry to give vastly different perspectives.

Question 7

The statement of financial position is a special case of the more general cash flow statement.

Accepted Answer

A) True 
 B)False

Question 8

The balance sheet gives insight into the cash-generating potential of the operations of a firm.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following methods reports literal cash flows related to income statement classifications?

Accepted Answer

A) The indirect method 
B) The direct method 
C) Both a and b. 
D) None of the above 
A) The indirect method 
B) The direct method 
C) Both a and b. 
D) None of the above

Question 10

How does the statement of cash flows sometimes cause a non-articulation problem?

Accepted Answer

A recent study has found that where the

Question 11

On the statement of cash flows, the proceeds from the sale of equipment would be classified as:

Accepted Answer

A) an investing activity. 
B) an operating activity. 
C) a financing activity. 
D) either an investing, operating, or financing activity. 
A) an investing activity. 
B) an operating activity. 
C) a financing activity. 
D) either an investing, operating, or financing activity.

Question 12

The direct method requires a schedule reconciling net operating cash flow with net income.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a true statement?

Accepted Answer

A) Liquidity is the ability of the firm to adapt to new situations and opportunities. 
B) Cash flow measurement is more uniform than income measurement. 
C) The current-non-current classification system in the balance sheet is a good guide to liquidity. 
D) The balance sheet gives insight into the cash-generating potential of operations. 
A) Liquidity is the ability of the firm to adapt to new situations and opportunities. 
B) Cash flow measurement is more uniform than income measurement. 
C) The current-non-current classification system in the balance sheet is a good guide to liquidity. 
D) The balance sheet gives insight into the cash-generating potential of operations.

Question 14

The funds flow statement included only transactions affecting fund accounts.

Accepted Answer

A) True 
 B)False

Question 15

On the statement of cash flows, the direct method starts with accrual income and adjusts it for the non-cash items it contains.

Accepted Answer

A) True 
 B)False

Question 16

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting liquid assets and those affecting other accounts.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true for intrinsic values?

Accepted Answer

A) It is the present value of future expected cash flows. 
B) It is unaffected by changes in interest rates. 
C) It must be below current market price for a stock purchase to be acceptable. 
D) It is the undiscounted value of the cash that can be taken out of a business during its remaining life. 
A) It is the present value of future expected cash flows. 
B) It is unaffected by changes in interest rates. 
C) It must be below current market price for a stock purchase to be acceptable. 
D) It is the undiscounted value of the cash that can be taken out of a business during its remaining life.

Question 18

A FASB discussion memorandum suggested that cash flow data are a useful supplemental disclosure for all of the following reasons except:

Accepted Answer

A) they provide information about the quality of income. 
B) they aid in assessing flexibility and liquidity. 
C) they help to identify the relationship between accounting income and cash flows. 
D) they are a better predictor of future earnings than is accounting income. 
A) they provide information about the quality of income. 
B) they aid in assessing flexibility and liquidity. 
C) they help to identify the relationship between accounting income and cash flows. 
D) they are a better predictor of future earnings than is accounting income.

Question 19

For capital budgeting purposes, an investment is acceptable if:

Accepted Answer

A) the present value of the expected net cash flows is positive. 
B) net present value is positive. 
C) the intrinsic value is greater than the current market price. 
D) all of the above. 
A) the present value of the expected net cash flows is positive. 
B) net present value is positive. 
C) the intrinsic value is greater than the current market price. 
D) all of the above.

Question 20

Most firms elected to define funds in the statement of changes in financial position as cash.

Accepted Answer

A) True 
 B)False

APB Opinion No. 19 permitted fund balance accounts in the statement of changes in financial position to include which of the following?

Which of the following is a true statement?

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting:

An exit-price accounting system provides an estimate of the cash conversion value of a firm's resources.

For capital leases, the interest portion is classified as an operating activity, whereas the reduction of principal portion is a financing activity.

Which of the following is true about the Statement of Cash Flows (SCF)?

The statement of financial position is a special case of the more general cash flow statement.

The balance sheet gives insight into the cash-generating potential of the operations of a firm.

Which of the following methods reports literal cash flows related to income statement classifications?

How does the statement of cash flows sometimes cause a non-articulation problem?

On the statement of cash flows, the proceeds from the sale of equipment would be classified as:

The direct method requires a schedule reconciling net operating cash flow with net income.

Which of the following is a true statement?

The funds flow statement included only transactions affecting fund accounts.

On the statement of cash flows, the direct method starts with accrual income and adjusts it for the non-cash items it contains.

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting liquid assets and those affecting other accounts.

Which of the following is true for intrinsic values?

A FASB discussion memorandum suggested that cash flow data are a useful supplemental disclosure for all of the following reasons except:

For capital budgeting purposes, an investment is acceptable if:

Most firms elected to define funds in the statement of changes in financial position as cash.

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

International Accounting

The Balance Sheet

The Income Statement

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 13: Statement of Cash Flows

APB Opinion No. 19 permitted fund balance accounts in the statement of changes in financial position to include which of the following?

Which of the following is a true statement?

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting:

An exit-price accounting system provides an estimate of the cash conversion value of a firm's resources.

For capital leases, the interest portion is classified as an operating activity, whereas the reduction of principal portion is a financing activity.

Which of the following is true about the Statement of Cash Flows (SCF)?

The statement of financial position is a special case of the more general cash flow statement.

The balance sheet gives insight into the cash-generating potential of the operations of a firm.

Which of the following methods reports literal cash flows related to income statement classifications?

How does the statement of cash flows sometimes cause a non-articulation problem?

On the statement of cash flows, the proceeds from the sale of equipment would be classified as:

The direct method requires a schedule reconciling net operating cash flow with net income.

Which of the following is a true statement?

The funds flow statement included only transactions affecting fund accounts.

On the statement of cash flows, the direct method starts with accrual income and adjusts it for the non-cash items it contains.

In the sources section of the statement of changes in financial position, transactions are subclassified into those affecting liquid assets and those affecting other accounts.

Which of the following is true for intrinsic values?

A FASB discussion memorandum suggested that cash flow data are a useful supplemental disclosure for all of the following reasons except:

For capital budgeting purposes, an investment is acceptable if:

Most firms elected to define funds in the statement of changes in financial position as cash.

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

International Accounting

The Balance Sheet

The Income Statement

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters