Question :
111.Refer to the information above. A statement of cash flows : 1259615
111.Refer to the information above. A statement of cash flows for February, would report net cash flows from investing activities of:
A. ($4,000).
B. $47,000.
C. $53,600.
D. $76,000.
112.Refer to the information above. A statement of cash flows for February, would report an increase in cash of:
A. ($4,000).
B. $47,000.
C. $53,600.
D. $96,600.
113.If cash flows from operating activities is a positive amount, then:
A. The amount will be shown on the statement of cash flows in parentheses.
B. The company must have had a net profit for the year.
C. The company must have paid off more debts than it earned during the year.
D. The company may still have a decrease in the total amount of cash for the period.
114.The change in owners’ equity due to only revenue and expense transactions is explained by the:
A. Statement of cash flows.
B. Statement of financial position.
C. Income statement.
D. Tax return.
115.Which one of the following is not considered as one of the three primary financial statements?
A. Balance sheet.
B. Income statement.
C. Statement of cash flows.
D. Statement of budgeting activities.
116.The way in which financial statements relate is known as:
A. Solvency.
B. Objectivity.
C. Articulation.
D. Entity.
117.Which business organization is recognized as a separate legal entity under the law?
A. Corporation.
B. Sole proprietorship.
C. Partnership.
D. All business organizations are separate legal entities.
118.Retained earnings is:
A. The positive cash flows of a company.
B. The net worth of a company.
C. The owners’ equity that has accumulated as a result of profitable operations.
D. Equal to the total assets of a company.
119.Which of the following best describes liquidity?
A. The ability to increase the value of retained earnings.
B. The ability to pay the debts of the company as they become due.
C. Being able to buy everything the company requires for cash.
D. Purchasing everything the company requires on credit.
120.Profitability may be defined as:
A. The ability to pay the debts of the company as they become due.
B. The ability to increase retained earnings.
C. Distributing dividends out of retained earnings.
D. Having excess cash.
121.The principle of adequate disclosure means that a company should disclose:
A. Only the important monetary information.
B. All confidential information regarding the company.
C. Any financial facts that a reasonably informed person would consider necessary for the proper interpretation of the financial statements.
D. Only subsequent events.
122.Which of the following statements regarding liquidity and profitability is not true?
A. If a business is unable to pay its debts as they come due, it is operating unprofitably.
B. A business may be liquid, yet operate unprofitably for several years.
C. A business may operate profitably, yet be unable to meet its obligations.
D. In order to survive in the long-run, a business must both remain liquid and operate profitably.
123.The concept of adequate disclosure means that:
A. The accounting department of a business must inform management of the accounting principles used in preparing the financial statements.
B. The company must inform users of any significant facts necessary for proper interpretation of the financial statements, including events occurring after the financial statement date.
C. The independent auditors must disclose in the financial statements any and all errors detected in the company’s accounting records.
D. The financial statements should include a comprehensive list of each transaction that occurred during the year.
124.According to the Sarbanes-Oxley Act, CEOs and CFOs must certify to the accuracy of their company’s financial statements:
A. Monthly and Quarterly.
B. Quarterly and Annually.
C. Monthly and Annually.
D. CEOs and CFOs are not required to certify to the company’s financial statement; only CPA’s do.
125.A strong statement of financial position shows:
A. Large amounts of liquid assets relative to the liabilities due in the near future.
B. Large amounts of debt relative to stockholders’ equity.
C. That cash is being generated by operations.
D. That profits are being generated by operations.
