Question : 41. Both U.S. GAAP and IFRS permit considerable flexibility with respect : 1245950

 

 

41. Both U.S. GAAP and IFRS permit considerable flexibility with respect to the display of information in the statement of cash flows. Firms must report the beginning and ending cash balances, and the change in the cash balance.  The change in cash must reconcile to the sum of the cash inflows and outflows from _____ activities.  
A. operating
B. investing
C. financing
D. operating, investing, and financing
E. none of the above

 

42. Both U.S. GAAP and IFRS permit considerable flexibility with respect to the display of information in the statement of cash flows. If the firm uses the direct method of reporting cash flows from _____ activities rather than the indirect method, it must also provide a separate reconciliation of net income to cash flows from _____  
A. operating; operating
B. financing; financing
C. investing; investing
D. operating, investing; and financing; operating, investing; and financing;
E. none of the above

 

43. Both U.S. GAAP and IFRS permit considerable flexibility with respect to the display of information in the statement of cash flows.  Within the investing and financing cash flow categories, the presentation for most items should  _____.  
A. not net cash inflows against cash outflows
B. net cash inflows against cash outflows
C. net cash inflows against net income
D. net cash inflows against free cash flows
E. net free cash flows against cash outflows

 

44. Under U.S. GAAP, the statement of cash flows classifies cash expenditures for interest expense as a(n) _____ activity and classifies cash expenditures to redeem debt as a(n) _____ activity. 
A. financing; financing
B. financing: operating
C. operating; investing
D. operating; operating
E. operating; financing

 

45. Examples of nonmonetary transactions is/are: 
A. the acquisition of equipment in exchange for shares of common stock.
B. the conversion of a firm’s debt into common shares.
C. paying interest.
D. paying dividends.
E. both choices a and b.

 

46. On the statement of cash flows, the issuance of capital stock for cash to be used for future expansion of a production facility is treated as a/an 
A. investing activity.
B. financing activity.
C. operating activity.
D. exchange transaction.
E. funds flow activity.

 

47. Under U.S. GAAP, the statement of cash flows classifies changes in accounts payable as a(n) _____ activity and classifies changes in short-term bank borrowing as a(n) _____ activity.  
A. operating: financing
B. financing; operating
C. investing; operating
D. operating; operating
E. financing; financing

 

48. On the statement of cash flows, cash sale of property, plant and equipment used for the last 5 years in the company’s operations is treated as a/an 
A. investing activity.
B. financing activity.
C. operating activity.
D. exchange transaction.
E. funds flow activity.

 

49. The statement of cash flows reports the amount of cash flow from a firm’s 
A. divestiture, and acquisition activities.
B. operating, divestiture, and acquisition activities.
C. funding and disbursement activities.
D. operating, investing, and financing activities.
E. operating, funding and disbursement activities.

 

50. U.S. GAAP requires that the statement of cash flows disclose the amount of cash flows arising frominvesting activities including 
A. interest received on investments in bonds.
B. interest paid on the company’s bonds.
C. cash used for the acquisition of non-current assets.
D. cash dividends paid on the company’s stock.
E. cash dividends received on investments in other company’s stock.

 

 

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