Question 1

Liquidity refers to the ability of an enterprise to pay its debts as they mature.

Accepted Answer

A) True 
 B)False

Question 2

Keisler Corporation reports:
)

Accepted Answer

A)   TL250,000.
B)   TL320,000.
C)   TL470,000.
D)   TL540,000.E) All of the above
F) A) and B)

Question 3

Financial flexibility is a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

Accepted Answer

A) True 
 B)False

Question 4

Financial statement readers often assess liquidity by using current cash debt coverage.

Accepted Answer

A) True 
 B)False

Question 5

Lohmeyer Corporation reports:

Accepted Answer

A)   €330,000.
B)   €400,000.
C)   €550,000.
D)   €620,000.E) B) and D)
F) None of the above

Question 6

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents)  should be classified as cash outflows for

Accepted Answer

A)   operating activities.
B)   investing activities.
C)   financing activities.
D)   lending activities.E) B) and C)
F) A) and B)

Question 7

Which of the following is not an acceptable major asset classification?

Accepted Answer

A)   Current assets
B)   Investments
C)   Property, plant, and equipment
D)   Deferred chargesE) C) and D)
F) B) and D)

Question 8

The statement of cash flows reports all of the following except

Accepted Answer

A)   the net change in cash for the period.
B)   the cash effects of operations during the period.
C)   the free cash flows generated during the period.
D)   investing transactions.E) A) and D)
F) A) and C)

Question 9

Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as

Accepted Answer

A)   current assets.
B)   property, plant, and equipment.
C)   intangible assets.
D)   long-term investments.E) B) and C)
F) B) and D)

Question 10

Stine Corp.'s trial balance reflected the following account balances at December 31, 2019:

Accepted Answer

A)   R$101,000.
B)   R$92,000.
C)   R$87,000.
D)   R$83,000.E) A) and B)
F) A) and C)

Question 11

Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

Accepted Answer

A) True 
 B)False

Question 12

The accounting profession has recommended that companies use the word reserve only to describe amounts deducted from assets.

Accepted Answer

A) True 
 B)False

Question 13

Pedigo Corporation reports the following information:

Accepted Answer

A)   0.90.
B)   1.50.
C)   2.25.
D)   4.09.E) C) and D)
F) B) and C)

Question 14

Current cash debt coverage is often used to assess

Accepted Answer

A)   financial flexibility.
B)   liquidity.
C)   profitability.
D)   solvency.E) B) and D)
F) A) and D)

Question 15

Non-current liabilities include

Accepted Answer

A)   obligations not expected to be liquidated within the next year or operating cycle.
B)   obligations payable at some date beyond the next year or operating cycle.
C)   deferred income taxes and most lease obligations.
D)   All of these choices are correct.E) B) and C)
F) A) and B)

Question 16

Packard Corporation reports the following information:
Net cash provided by operating activities €275,000
Average current liabilities 150,000
Average non-current liabilities 100,000
Dividends declared 60,000
Capital expenditures 110,000
Payments of debt 35,000
Packard's cash debt coverage is

Accepted Answer

A)   1.10.
B)   1.83.
C)   2.75.
D)   6.11.E) B) and D)
F) B) and C)

Question 17

The statement of financial position can help assess all of the following except

Accepted Answer

A)   Solvency.
B)   Financial flexibility.
C)   Profitability.
D)   Liquidity.E) B) and D)
F) A) and D)

Question 18

Cash debt coverage is computed by dividing net cash provided by operating activities by

Accepted Answer

A)   average non-current liabilities.
B)   average total liabilities.
C)   ending non-current liabilities.
D)   ending total liabilities.E) A) and B)
F) C) and D)

Question 19

The statement of financial position

Accepted Answer

A)   Omits many items that are of financial value.
B)   Makes very limited use of judgments and estimates.
C)   Uses fair value for most assets and liabilities.
D)   All of the choices are correct regarding the statement of financial position.E) A) and B)
F) A) and C)

Question 20

Free cash flow is net income less capital expenditures and dividends.

Accepted Answer

A) True 
 B)False

Exam 5: Statement of Financial Position and Statement of Cash Flows

Current cash debt coverage is often used to assess

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Liquidity refers to the ability of an enterprise to pay its debts as they mature.

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Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

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Packard Corporation reports the following information: Net cash provided by operating activities €275,000 Average current liabilities 150,000 Average non-current liabilities 100,000 Dividends declared 60,000 Capital expenditures 110,000 Payments of debt 35,000 Packard's cash debt coverage is

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Cash debt coverage is computed by dividing net cash provided by operating activities by

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Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as

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Which of the following is not an acceptable major asset classification?

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Lohmeyer Corporation reports:

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The statement of financial position

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Keisler Corporation reports: )

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The accounting profession has recommended that companies use the word reserve only to describe amounts deducted from assets.

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In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

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Financial statement readers often assess liquidity by using current cash debt coverage.

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Pedigo Corporation reports the following information:

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Non-current liabilities include

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Stine Corp.'s trial balance reflected the following account balances at December 31, 2019:

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Financial flexibility is a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

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The statement of cash flows reports all of the following except

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The statement of financial position can help assess all of the following except

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Free cash flow is net income less capital expenditures and dividends.

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