Cash Flow- Acc. Princip 2

The statement of cash flows should help investors and creditors assess each of the following except the

• a.   entity's ability to generate future income.

• b.   entity's ability to pay dividends.

• c.   reasons for the difference between net income and net cash provided by operating activities.

• d.   cash investing and financing transactions during the period.

The statement of cash flows

• a.         must be prepared on a daily basis

• b.   summarizes the operating, financing, and investing activities of an entity.

• c.         is another name for the income statement.

• d.         is a special section of the income statement.

Which one of the following items is not generally used in preparing a statement of cash flows?

• a.   Adjusted trial balance

• b.   Comparative balance sheets

• c.   Current income statement

• d.   Additional information

The primary purpose of the statement of cash flows is to

• a.   provide information about the investing and financing activities during a period.

• b.   prove that revenues exceed expenses if there is a net income.

• c.   provide information about the cash receipts and cash payments during a period.

• d.   facilitate banking relationships.

Which of the following financial statements can be used to reveal important information about the quality of reported net income?

• a.   the retained earnings statement

• b.   the statement of cash flows

• c.   the balance sheet

• d.   the cash budget

Lending money and collecting the loans are

• a.   operating activities.

• b.         investing activities

• c.   financing activities.

• d.   Non-cash investing and financing activities.

Each of the following are particularly interested in the statement of cash flows except

• a.   creditors.

• b.   employees.

• c.   stockholders.

• d.   government agencies.

The statement of cash flows reports each of the following except

• a.   cash receipts from operating activities.

• b.   cash payments from investing activities.

• c.   the net change in cash.

• d.   cash sales.

The order of presentation of activities on the statement of cash flows is

• a.   operating, investing, and financing.

• b.   operating, financing, and investing.

• c.   financing, operating, and investing.

• d.   financing, investing, and operating.

Financing activities involve

• a.   lending money.

• b.   acquiring investments.

• c.   issuing debt.

• d.   acquiring long-lived assets.