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Question 1

Cash equivalents would NOT include

Savings account balances.

Treasury bills.

Treasury note purchases three years ago, but maturing in two months.

Money market funds.

Question 2

In the statement of cash flows, the change in cash is explained in terms of all of the following EXCEPT:

Operating activities.

Investing activities.

Financing activities.

Income activities.

Question 3

When can information in a Statement of Cash Flows substitute for information in an income statement?

During an expanding business cycle.

During a contracting business cycle.

Always.

Never.

Question 4

All of the following are considered noncash investing and financing activities EXCEPT:

Exchange of a noncash asset or liability for another.

Conversion of debt to equity.

Acquisition of assets either by assuming directly related liabilities or by means of a capital lease.

Sale of a piece of equipment for exactly what it was purchased for.

Question 5

Which of the following is a cash flow from an operating activity?

Interest received.

Payment for a patent.

Proceeds from bond issuance.

Trading of a building for land.

Question 6

The accounting principle that requires significant noncash activities to be disclosed is the

Golden Rule Principle.

Full Disclosure Principle.

GAAP Cash Flows Mandate.

Tell All Requirement.

Question 7

All of the following are examples of cash outflows from operating activities EXCEPT

Payments of interest on debt.

Loans made to other parties.

Payments to suppliers for goods and services.

Checks written to employees for labor provided.

Question 8

The liquidity of income ratio used in financial analysis is

Current assets/current liabilities.

Cash flow from operations/current liabilities.

Cash flow from operations/net income.

Total cash flow/net income.

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Question 10

An example of cash provided by investing activity is

Purchase of land.

Sale of a building.

Repayment of a mortgage.

Buy back of outstanding stock.