ACCT300 Chapter 5 Clicker Questions – Flashcards

The balance sheet is useful for analyzing all of the following except: 1. liquidity 2. solvency 3. profitability 4. financial flexibility

The amount of time that is expected to elapse until an asset is converted into cash is referred to as: 1. solvency. 2. financial flexibility. 3. liquidity. 4. exchangeability.

Financial flexibility measures the ability of a company to take actions to alter the amounts and timing of cash flows to respond to unexpected events?

The basis for classifying assets as current or noncurrent is conversion to cash within: 1. the operating cycle or one year, whichever is longer. 2. the operating cycle or one year, whichever is shorter. 3. determined by management on a company by company basis

The correct order to present current assets is : 1. Cash, inventories, accounts receivable, prepaid items. 2. Cash, accounts receivable, inventories, prepaid items. 3. Cash, inventories, prepaid items, accounts receivable.

Which of the following is not a long-term investment? 1. A sinking fund 2. Patent 3. Stock held in another company 4. Land held for speculation

The stockholders' equity section is usually divided into what three parts? 1. Preferred stock, common stock, treasury stock 2. Preferred stock, common stock, retained earnings 3. Capital stock, additional paid-in capital, retained earnings 4. Capital stock, common stock, retained earnings

Which of the following balance sheet classifications would normally require the greatest amount of supplementary disclosure? 1. Current assets 2. Current liabilities 3. Plant assets 4. Long-term liabilities

The statement of cash flows provides answers to all of the following questions except: 1. Where did the cash come from? 2. What was the cash used for? 3. What is the impact of inflation on the cash balance at year end? 4. What was the change in the cash balance during the period?

Preparing the statement of cash flows involves all of the following except determining the : 1. cash provided by operations. 2. cash provided by investing and financing activities. 3. change in cash during the period. 4. cash collections from customers during the period.

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

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity? 1. Sale of equipment at book value 2. Purchase of treasury stock 3. Declaration of a cash dividend 4. Issuance of bonds payable

In a statement of cash flows, proceeds from issuing stock should be classified as cash inflows from: 1. operating activities 2. investing activities 3. lending activities 4. financing activities

In a statement of cash flows, payments to acquire debt instruments of other entities should be classified as cash inflows for: 1. operating activities. 2. financing activities. 3. lending activities. 4. investing activities.