Chapter 7: Funds Analysis, Cash Flow Analysis, and Financial Planning
Just click on the button next to each answer and you'll get immediate feedback.Note: Your browser must support JavaScript in order to use this quiz.
1.According to the accounting profession, which of the following would be considered a cash-flow item from an "investing" activity?cash inflow from interest income.cash inflow from dividend income.
cash outflow to acquire fixed assets.
all of the above.
2.According to the Financial Accounting Standards Board (FASB), which of the following is a cash flow from a "financing" activity?cash outflow to the government for taxes.
cash outflow to shareholders as dividends.
cash outflow to lenders as interest.
cash outflow to purchase bonds issued by another company.
3.If the following are balance sheet changes:
$5,005 decrease in accounts receivable
$7,000 decrease in cash
$12,012 decrease in notes payable
$10,001 increase in accounts payable
a "use" of funds would be the:$7,000 decrease in cash.
$5,005 decrease in accounts receivable.
$10,001 increase in accounts payable.
$12,012 decrease in notes payable.
4.On an accounting statement of cash flows an "increase(decrease) in cash and cash equivalents" appears asa cash flow from operating activities.
a cash flow from investing activities.
a cash flow from financing activities.
none of the above.
5.Uses of funds include a (an):decrease in cash.
increase in any liability.
increase in fixed assets.
tax refund.
6.Which of the following would be included in a cash budget?depreciation charges.
dividends.
goodwill.
patent amortization.
7.An examination of the sources and uses of funds statement is part of:a forecasting technique.
a funds flow analysis.
a ratio analysis.
calculations for preparing the balance sheet.
8.Which of the following is NOT a cash outflow for the firm?depreciation.
dividends.
interest payments.
taxes.
9.Which of the following would be considered a use of funds?a decrease in accounts receivable.
a decrease in cash.
an increase in account payable.
an increase in cash.
10.The cash flow statement in the United States is most likely to appear usinga "supplementary method."
a "direct method."
an "indirect method."
a "flow of funds method."
11.For a profitable firm, total sources of funds will always total uses of funds.be equal to
be greater than
be less than
have no consistent relationship to
Multiple-Choice Quiz questions are Copyright © by Pearson Education Limited. Used by permission. All rights reserved.
Previous Quiz | Back to Main Index | Next Quiz
3.The following items would be classified as investing activities on the statement of cash flows:
Get answer to your question and much more
4.The following items would be classified as financing activities on the statement of cash flows:
Get answer to your question and much more
5.What type of accounts are accounts receivable and accounts payable?
Get answer to your question and much more
6.What is implied if the accounts receivable account has increased?
Get answer to your question and much more
7.What impact does depreciation have on the cash account?
Get answer to your question and much more
8.Which of the following items are included in the adjustments to net income to obtain cash flowfrom operating activities?
Get answer to your question and much more
9.How would you know if a statement of cash flows had been prepared using the direct or theindirect method?
Get answer to your question and much more
10.If net cash provided or used by operating, financing and investing activities are addedtogether, the result is:
Get answer to your question and much more
11.Which item may be of concern when analyzing cash flow from operating activities?
Get answer to your question and much more
12.Which of the following could be indicative of cash flow problems or a result of an expansion?
Get answer to your question and much more
Questions 13-16 are based on the indirect method of presenting cash flow from operatingactivities.