,AnalysisForFinancialManagement13thEditionRobertHiggins,JenniferKos ki,
gt gt gt gt gt gt gt gt gt gt
Todd Mitton
gt ol
Studentname:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
gt gt gt gt gt gt ol gt gt gt gt gt gt gt gt
1) Current liabilities are defined as liabilities with a maturity of less than one year.
gt gt gt gt gt gt gt gt gt gt ol ol gt
⊚ true
⊚ false
2) A decline in the Net Property, Plant, and Equipment account between year-
gt gt ol gt gt gt gt ol gt gt gt
end2020and year-end 2021 is a clear indication that fixed assets were sold during 2021.
gt gt ol gt gt gt gt gt gt ol gt gt gt gt ol
⊚ true
⊚ false
3) When reporting financial performance fortax purposes, U.S. companies prefer to use a cc
ol gt gt gt gt gt gt gt gt gt gt gt gt
elerated depreciation methods over the straight-line method.
ol gt gt gt gt gt
⊚ true
⊚ false
4) Accounting rules require U.S. companies to depreciate research and development (R&D) e xp
gt gt gt gt gt gt gt gt gt gt gt gt
enditures using the straight-line method.
gt ol gt gt
⊚ true
⊚ false
5) You can construct a sources and uses statement for 2021 if you have a company’s year-
gt gt ol gt gt gt gt gt gt gt gt ol gt ol gt
end balance sheets for 2021 and 2022.
gt gt gt gt gt gt gt
⊚ true
⊚ false
6) A reduction in long-term debt is a use of cash.
gt gt gt gt ol gt ol gt gt
⊚ true
⊚ false
,7) The accrual principle requires that revenue not be recognized until payment from a sale is re cei
gt gt gt gt gt gt gt gt ol gt gt gt ol gt gt gt
ved.
⊚ true
⊚ false
8) An increase in cash and cash equivalents should appear as a use of cash on the sources an d us
gt gt gt gt gt ol gt gt gt gt gt gt gt gt gt gt gt gt gt
es statement.
gt
⊚ true
⊚ false
9) A cash flow statement places each source or use of cash into one of threebroad ca teg
gt gt gt gt gt gt gt gt gt gt ol gt gt gt gt gt gt
ories: operating activities, investing activities, or financing activities.
gt gt gt gt gt gt gt
⊚ true
⊚ false
10) The cost of equityis usually reported on the income statement right below interest ex pe
gt gt gt gt ol gt gt gt gt gt gt ol gt gt gt
nse.
⊚ true
⊚ false
11) The United States was one of the first countries to adopt International Financial R ep
ol gt ol gt gt gt gt gt gt gt gt gt gt gt
orting Standards.
gt
⊚ true
⊚ false
MULTIPLE CHOICE - gt gt
Choose the one alternative that best completes the statement or answers the question.
gt gt gt gt gt gt gt ol ol gt gt gt
12) Which of the following statements concerning a firm’s cash flows and profits is false?
gt gt gt gt gt gt gt gt gt gt gt gt gt
, A) Managers must be at least as concerned with cash flows as with profits. gt gt gt gt gt gt gt gt gt gt gt gt
B) A companythat sells merchandise at a profit can be assured of generating cash soon en ou
gt gt gt ol gt gt ol gt gt gt gt gt gt gt gt gt
gh to replenish cash flows required for continued production.
gt gt gt gt gt gt gt gt
C) Thecash flows generated in a given time period can differ from the profits reported.
gt gt gt gt ol gt gt gt ol gt gt gt gt gt
D) Profits are no assurance that cash flow will be sufficient to maintain solvency. gt gt gt gt gt gt gt gt gt gt gt gt
E) Dueto required cash investments in current assets, fast-
gt gt gt gt gt gt gt gt
growing and profitable companies can literally “grow broke”.
gt gt gt gt gt ol gt gt
13) Which of the followingis NOT a typical reason for differences between profits and cash fl ow?
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
A) Goodwill
B) Depreciation expense gt
C) Changes in accounts receivable gt gt gt
D) Accrual accounting practices gt gt
14) Which one of the following is the financial statement that shows a financial snapshot, ta ke
gt gt gt gt ol gt gt gt gt gt gt ol gt gt gt
n at a point in time, of all the assets the company owns and all the claims against those assets
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
?
A) Income statement gt
B) Creditor’s statement ol
C) Balance sheet gt
D) Cash flow statement gt gt
E) Sources and uses statement gt gt gt
15) A balance sheet reports the value of a firm’s assets, liabilities, and equity
gt gt gt gt gt gt gt gt gt gt gt ol
A) over an annual period. gt ol gt
B) over any period of time. gt gt ol gt
C) at any point in time.
gt gt gt gt
D) at the end of the year only.
gt gt gt gt gt gt
gt gt gt gt gt gt gt gt gt gt
Todd Mitton
gt ol
Studentname:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
gt gt gt gt gt gt ol gt gt gt gt gt gt gt gt
1) Current liabilities are defined as liabilities with a maturity of less than one year.
gt gt gt gt gt gt gt gt gt gt ol ol gt
⊚ true
⊚ false
2) A decline in the Net Property, Plant, and Equipment account between year-
gt gt ol gt gt gt gt ol gt gt gt
end2020and year-end 2021 is a clear indication that fixed assets were sold during 2021.
gt gt ol gt gt gt gt gt gt ol gt gt gt gt ol
⊚ true
⊚ false
3) When reporting financial performance fortax purposes, U.S. companies prefer to use a cc
ol gt gt gt gt gt gt gt gt gt gt gt gt
elerated depreciation methods over the straight-line method.
ol gt gt gt gt gt
⊚ true
⊚ false
4) Accounting rules require U.S. companies to depreciate research and development (R&D) e xp
gt gt gt gt gt gt gt gt gt gt gt gt
enditures using the straight-line method.
gt ol gt gt
⊚ true
⊚ false
5) You can construct a sources and uses statement for 2021 if you have a company’s year-
gt gt ol gt gt gt gt gt gt gt gt ol gt ol gt
end balance sheets for 2021 and 2022.
gt gt gt gt gt gt gt
⊚ true
⊚ false
6) A reduction in long-term debt is a use of cash.
gt gt gt gt ol gt ol gt gt
⊚ true
⊚ false
,7) The accrual principle requires that revenue not be recognized until payment from a sale is re cei
gt gt gt gt gt gt gt gt ol gt gt gt ol gt gt gt
ved.
⊚ true
⊚ false
8) An increase in cash and cash equivalents should appear as a use of cash on the sources an d us
gt gt gt gt gt ol gt gt gt gt gt gt gt gt gt gt gt gt gt
es statement.
gt
⊚ true
⊚ false
9) A cash flow statement places each source or use of cash into one of threebroad ca teg
gt gt gt gt gt gt gt gt gt gt ol gt gt gt gt gt gt
ories: operating activities, investing activities, or financing activities.
gt gt gt gt gt gt gt
⊚ true
⊚ false
10) The cost of equityis usually reported on the income statement right below interest ex pe
gt gt gt gt ol gt gt gt gt gt gt ol gt gt gt
nse.
⊚ true
⊚ false
11) The United States was one of the first countries to adopt International Financial R ep
ol gt ol gt gt gt gt gt gt gt gt gt gt gt
orting Standards.
gt
⊚ true
⊚ false
MULTIPLE CHOICE - gt gt
Choose the one alternative that best completes the statement or answers the question.
gt gt gt gt gt gt gt ol ol gt gt gt
12) Which of the following statements concerning a firm’s cash flows and profits is false?
gt gt gt gt gt gt gt gt gt gt gt gt gt
, A) Managers must be at least as concerned with cash flows as with profits. gt gt gt gt gt gt gt gt gt gt gt gt
B) A companythat sells merchandise at a profit can be assured of generating cash soon en ou
gt gt gt ol gt gt ol gt gt gt gt gt gt gt gt gt
gh to replenish cash flows required for continued production.
gt gt gt gt gt gt gt gt
C) Thecash flows generated in a given time period can differ from the profits reported.
gt gt gt gt ol gt gt gt ol gt gt gt gt gt
D) Profits are no assurance that cash flow will be sufficient to maintain solvency. gt gt gt gt gt gt gt gt gt gt gt gt
E) Dueto required cash investments in current assets, fast-
gt gt gt gt gt gt gt gt
growing and profitable companies can literally “grow broke”.
gt gt gt gt gt ol gt gt
13) Which of the followingis NOT a typical reason for differences between profits and cash fl ow?
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
A) Goodwill
B) Depreciation expense gt
C) Changes in accounts receivable gt gt gt
D) Accrual accounting practices gt gt
14) Which one of the following is the financial statement that shows a financial snapshot, ta ke
gt gt gt gt ol gt gt gt gt gt gt ol gt gt gt
n at a point in time, of all the assets the company owns and all the claims against those assets
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
?
A) Income statement gt
B) Creditor’s statement ol
C) Balance sheet gt
D) Cash flow statement gt gt
E) Sources and uses statement gt gt gt
15) A balance sheet reports the value of a firm’s assets, liabilities, and equity
gt gt gt gt gt gt gt gt gt gt gt ol
A) over an annual period. gt ol gt
B) over any period of time. gt gt ol gt
C) at any point in time.
gt gt gt gt
D) at the end of the year only.
gt gt gt gt gt gt
