Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

With SFAS No. 95 defining funds as cash, the FASB has:

Accepted Answer

A)  Moved from a flexibility orientation to a position of rigid uniformity. 
B)  Moved from a position of rigid uniformity to one of finite uniformity. 
C)  Moved from a position of rigid uniformity to a flexibility orientation. 
D)  Moved from a flexibility orientation to a position of finite unity. 
A)  Moved from a flexibility orientation to a position of rigid uniformity. 
B)  Moved from a position of rigid uniformity to one of finite uniformity. 
C)  Moved from a position of rigid uniformity to a flexibility orientation. 
D)  Moved from a flexibility orientation to a position of finite unity. A

Question 3

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. D

Question 4

SFAS No. 95 requires that all noncash investing and financing transactions be reported in the body of the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Cash. 
B)  Working capital. 
C)  Current assets. 
D)  Owners' equity. 
A)  Cash. 
B)  Working capital. 
C)  Current assets. 
D)  Owners' equity.

Question 6

Identify and describe the three categories of cash flows reported on the statement of cash flows. What problems have been noted related to this classification system?

Accepted Answer

The cash flow statement subclassifies ca

Question 7

Which of the following directly preceded the statement of changes in financial position?

Accepted Answer

A)  The statement of cash flows 
B)  The funds flow statement 
C)  The sources and uses of funds statement 
D)  The sources and uses of resources statement 
A)  The statement of cash flows 
B)  The funds flow statement 
C)  The sources and uses of funds statement 
D)  The sources and uses of resources statement

Question 8

Compare and contrast the two methods that may be used to present operating cash flows in the statement of cash flows. Which method is preferred by firms and by outsiders?

Accepted Answer

SFAS No. 95 allows operating cash flows

Question 9

The cash flow statement is the statement of financial position with funds defined as cash.

Accepted Answer

A) True 
 B)False

Question 10

How does the statement of cash flows sometimes cause a nonarticulation problem?

Accepted Answer

A recent study has found that where the

Question 11

The statement of changes in financial position reported on changes in assets, liabilities, and owners' equity account balances.

Accepted Answer

A) True 
 B)False

Question 12

With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Discuss arguments supporting the need for improving the Statement of Cash Flows (SCF). What suggestions do Broom and the authors of the text make regarding improvement?

Accepted Answer

Broome states that SFAS No. 95's flexibi

Question 15

In the statement of changes in financial position, sources of resources are defined as:

Accepted Answer

A)  Transaction debits. 
B)  Fund increases. 
C)  Transaction credits. 
D)  Fund decreases. 
A)  Transaction debits. 
B)  Fund increases. 
C)  Transaction credits. 
D)  Fund decreases.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

With SFAS No. 95 defining funds as cash, the FASB has moved from a position of rigid uniformity to a flexibility orientation.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following methods starts with accrual income and adjusts it for the noncash items it contains?

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 19

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 20

Which of the following is a true statement regarding an exit-price accounting system?

Accepted Answer

A)  It measures flexibility of the firm in terms of the amount of cash that would be realized from a forced liquidation of assets. 
B)  It provides an excellent indicator of liquidity. 
C)  It provides an estimate of the speed of conversion of a firm's resources. 
D)  It provides an estimate of the cash conversion value of a firm's resources. 
A)  It measures flexibility of the firm in terms of the amount of cash that would be realized from a forced liquidation of assets. 
B)  It provides an excellent indicator of liquidity. 
C)  It provides an estimate of the speed of conversion of a firm's resources. 
D)  It provides an estimate of the cash conversion value of a firm's resources.

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

With SFAS No. 95 defining funds as cash, the FASB has:

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

SFAS No. 95 requires that all noncash investing and financing transactions be reported in the body of the cash flow statement.

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

Identify and describe the three categories of cash flows reported on the statement of cash flows. What problems have been noted related to this classification system?

Which of the following directly preceded the statement of changes in financial position?

Compare and contrast the two methods that may be used to present operating cash flows in the statement of cash flows. Which method is preferred by firms and by outsiders?

The cash flow statement is the statement of financial position with funds defined as cash.

How does the statement of cash flows sometimes cause a nonarticulation problem?

The statement of changes in financial position reported on changes in assets, liabilities, and owners' equity account balances.

With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.

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

Discuss arguments supporting the need for improving the Statement of Cash Flows (SCF). What suggestions do Broom and the authors of the text make regarding improvement?

In the statement of changes in financial position, sources of resources are defined as:

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

With SFAS No. 95 defining funds as cash, the FASB has moved from a position of rigid uniformity to a flexibility orientation.

Which of the following methods starts with accrual income and adjusts it for the noncash items it contains?

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

Which of the following is a true statement regarding an exit-price accounting system?

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

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 13: Statements of Cash Flows

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

With SFAS No. 95 defining funds as cash, the FASB has:

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

SFAS No. 95 requires that all noncash investing and financing transactions be reported in the body of the cash flow statement.

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

Identify and describe the three categories of cash flows reported on the statement of cash flows. What problems have been noted related to this classification system?

Which of the following directly preceded the statement of changes in financial position?

Compare and contrast the two methods that may be used to present operating cash flows in the statement of cash flows. Which method is preferred by firms and by outsiders?

The cash flow statement is the statement of financial position with funds defined as cash.

How does the statement of cash flows sometimes cause a nonarticulation problem?

The statement of changes in financial position reported on changes in assets, liabilities, and owners' equity account balances.

With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.

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

Discuss arguments supporting the need for improving the Statement of Cash Flows (SCF). What suggestions do Broom and the authors of the text make regarding improvement?

In the statement of changes in financial position, sources of resources are defined as:

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

With SFAS No. 95 defining funds as cash, the FASB has moved from a position of rigid uniformity to a flexibility orientation.

Which of the following methods starts with accrual income and adjusts it for the noncash items it contains?

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

Which of the following is a true statement regarding an exit-price accounting system?

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

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters