TestgBankgforg AnalysisgForgFinancialgManagementg13thgEditiongRobertgHi
ggins,gJennifergKoski,gToddgMitton
Studentgname:g
TRUE/FALSEg-gWriteg'T'gifgthegstatementgisgtruegandg'F'gifgthegstatementgisgfalse.
1) Currentgliabilitiesgaregdefinedgasgliabilitiesgwithgagmaturitygofglessgthangonegyear.
⊚ true
⊚ false
2) AgdeclinegingthegNetgProperty,gPlant,gandgEquipmentgaccountgbetweengyear-
endg2020gandgyear-endg2021gisgagcleargindicationgthatgfixedgassetsgweregsoldgduringg2021.
⊚ true
⊚ false
3) Whengreportinggfinancialgperformancegforgtaxgpurposes,gU.S.gcompaniesgprefergtogus
egacceleratedgdepreciationgmethodsgovergthegstraight-linegmethod.
⊚ true
⊚ false
4) AccountinggrulesgrequiregU.S.gcompaniesgtogdepreciategresearchgandgdevelopmentg(R&
D)gexpendituresgusinggthegstraight-linegmethod.
⊚ true
⊚ false
5) Yougcangconstructgagsourcesgandgusesgstatementgforg2021gifgyoughavegagcompany’sgyea
r-gendgbalancegsheetsgforg2021gandg2022.
⊚ true
⊚ false
6) Agreductionginglong-termgdebtgisgagusegofgcash.
⊚ true
⊚ false
,7) Thegaccrualgprinciplegrequiresgthatgrevenuegnotgbegrecognizedguntilgpaymentgfromgagsaleg
isgreceived.
⊚ true
⊚ false
8) Angincreasegingcashgandgcashgequivalentsgshouldgappeargasgagusegofgcashgongthegsourc
esgandgusesgstatement.
⊚ true
⊚ false
9) Agcashgflowgstatementgplacesgeachgsourcegorgusegofgcashgintogonegofgthreegbro
adgcategories:goperatinggactivities,ginvestinggactivities,gorgfinancinggactivities.
⊚ true
⊚ false
10) Thegcostgofgequitygisgusuallygreportedgongthegincomegstatementgrightgbelowgintere
stgexpense.
⊚ true
⊚ false
11) ThegUnitedgStatesgwasgonegofgthegfirstgcountriesgtogadoptgInternationalgFinanci
algReportinggStandards.
⊚ true
⊚ false
MULTIPLEgCHOICEg-
gChoosegthegonegalternativegthatgbestgcompletesgthegstatementgorganswersgthegquestion.
12) Whichgofgthegfollowinggstatementsgconcerninggagfirm’sgcashgflowsgandgprofitsgisgfalse?
, A) Managersgmustgbegatgleastgasgconcernedgwithgcashgflowsgasgwithgprofits.
B) Agcompanygthatgsellsgmerchandisegatgagprofitgcangbegassuredgofggeneratinggcashgso
ongenoughgtogreplenishgcashgflowsgrequiredgforgcontinuedgproduction.
C) Thegcashgflowsggeneratedgingaggivengtimegperiodgcangdiffergfromgthegprofitsgreported.
D) Profitsgaregnogassurancegthatgcashgflowgwillgbegsufficientgtogmaintaingsolvency.
E) Duegtogrequiredgcashginvestmentsgingcurrentgassets,gfast-
growinggandgprofitablegcompaniesgcangliterallyg“growgbroke”.
13) WhichgofgthegfollowinggisgNOTgagtypicalgreasongforgdifferencesgbetweengprofitsgandgca
shgflow?
A) Goodwill
B) Depreciationgexpense
C) Changesgingaccountsgreceivable
D) Accrualgaccountinggpractices
14) Whichgonegofgthegfollowinggisgthegfinancialgstatementgthatgshowsgagfinancialgsnapsho
t,gtakengatgagpointgingtime,gofgallgthegassetsgthegcompanygownsgandgallgthegclaimsgagainstgthos
egassets?
A) Incomegstatement
B) Creditor’sgstatement
C) Balancegsheet
D) Cashgflowgstatement
E) Sourcesgandgusesgstatement
15) Agbalancegsheetgreportsgthegvaluegofgagfirm’sgassets,gliabilities,gandgequity
A) overgangannualgperiod.
B) overganygperiodgofgtime.
C) atganygpointgingtime.
D) atgthegendgofgthegyeargonly.
, 16) Agcompanygsellsgusedgequipmentgwithgagbookgvaluegofg$100,000gforg$250,000gcash.gHo
wgwouldgthisgtransactiongaffectgthegcompany’sgbalancegsheet?
A) Equitygrisesg$250,000;gnetgplantgandgequipmentgfallsg$250,000.
B) Cashgrisesg$250,000;gnetgplantgandgequipmentgfallsg$100,000;gequitygrisesg$150,000.
C) Cashgrisesg$250,000;gaccountsgreceivablegfallsg$100,000;ggoodwillgrisesg$150,000.
D) Cashgrisesg$250,000;gnetgplantgandgequipmentgfallsg$250,000.
17) Agcompanygpurchasesgagnewg$10gmilliongbuildinggfinancedghalfgwithgcashgandghalfgwith
gagbankgloan.gHowgwouldgthisgtransactiongaffectgthegcompany’sgbalancegsheet?
A) Netgplantgandgequipmentgrisesg$10gmillion;gcashgfallsg$10gmillion;gbankgdebtgrisesg
$5gmillion.
B) Netgplantgandgequipmentgrisesg$5gmillion;gcashgfallsg$10gmillion;gbankgdebtgrisesg
$5gmillion.
C) Netgplantgandgequipmentgrisesg$5gmillion;gcashgfallsg$5gmillion;gbankgdebtgrisesg
$5gmillion.
D) Netgplantgandgequipmentgrisesg$10gmillion;gcashgfallsg$5gmillion;gbankgdebtgrisesg
$5gmillion.
18) Whichgonegofgthegfollowinggisgthegfinancialgstatementgthatgsummarizesgagfirm’sgreven
uegandgexpensesgovergagperiodgofgtime?
A) Incomegstatement
B) Balancegsheet
C) Cashgflowgstatement
D) Sourcesgandgusesgstatement
E) Marketgvaluegstatement
19) Thegsourcesgandgusesgofgcashgovergagstatedgperiodgofgtimegaregreflectedgingthe
ggins,gJennifergKoski,gToddgMitton
Studentgname:g
TRUE/FALSEg-gWriteg'T'gifgthegstatementgisgtruegandg'F'gifgthegstatementgisgfalse.
1) Currentgliabilitiesgaregdefinedgasgliabilitiesgwithgagmaturitygofglessgthangonegyear.
⊚ true
⊚ false
2) AgdeclinegingthegNetgProperty,gPlant,gandgEquipmentgaccountgbetweengyear-
endg2020gandgyear-endg2021gisgagcleargindicationgthatgfixedgassetsgweregsoldgduringg2021.
⊚ true
⊚ false
3) Whengreportinggfinancialgperformancegforgtaxgpurposes,gU.S.gcompaniesgprefergtogus
egacceleratedgdepreciationgmethodsgovergthegstraight-linegmethod.
⊚ true
⊚ false
4) AccountinggrulesgrequiregU.S.gcompaniesgtogdepreciategresearchgandgdevelopmentg(R&
D)gexpendituresgusinggthegstraight-linegmethod.
⊚ true
⊚ false
5) Yougcangconstructgagsourcesgandgusesgstatementgforg2021gifgyoughavegagcompany’sgyea
r-gendgbalancegsheetsgforg2021gandg2022.
⊚ true
⊚ false
6) Agreductionginglong-termgdebtgisgagusegofgcash.
⊚ true
⊚ false
,7) Thegaccrualgprinciplegrequiresgthatgrevenuegnotgbegrecognizedguntilgpaymentgfromgagsaleg
isgreceived.
⊚ true
⊚ false
8) Angincreasegingcashgandgcashgequivalentsgshouldgappeargasgagusegofgcashgongthegsourc
esgandgusesgstatement.
⊚ true
⊚ false
9) Agcashgflowgstatementgplacesgeachgsourcegorgusegofgcashgintogonegofgthreegbro
adgcategories:goperatinggactivities,ginvestinggactivities,gorgfinancinggactivities.
⊚ true
⊚ false
10) Thegcostgofgequitygisgusuallygreportedgongthegincomegstatementgrightgbelowgintere
stgexpense.
⊚ true
⊚ false
11) ThegUnitedgStatesgwasgonegofgthegfirstgcountriesgtogadoptgInternationalgFinanci
algReportinggStandards.
⊚ true
⊚ false
MULTIPLEgCHOICEg-
gChoosegthegonegalternativegthatgbestgcompletesgthegstatementgorganswersgthegquestion.
12) Whichgofgthegfollowinggstatementsgconcerninggagfirm’sgcashgflowsgandgprofitsgisgfalse?
, A) Managersgmustgbegatgleastgasgconcernedgwithgcashgflowsgasgwithgprofits.
B) Agcompanygthatgsellsgmerchandisegatgagprofitgcangbegassuredgofggeneratinggcashgso
ongenoughgtogreplenishgcashgflowsgrequiredgforgcontinuedgproduction.
C) Thegcashgflowsggeneratedgingaggivengtimegperiodgcangdiffergfromgthegprofitsgreported.
D) Profitsgaregnogassurancegthatgcashgflowgwillgbegsufficientgtogmaintaingsolvency.
E) Duegtogrequiredgcashginvestmentsgingcurrentgassets,gfast-
growinggandgprofitablegcompaniesgcangliterallyg“growgbroke”.
13) WhichgofgthegfollowinggisgNOTgagtypicalgreasongforgdifferencesgbetweengprofitsgandgca
shgflow?
A) Goodwill
B) Depreciationgexpense
C) Changesgingaccountsgreceivable
D) Accrualgaccountinggpractices
14) Whichgonegofgthegfollowinggisgthegfinancialgstatementgthatgshowsgagfinancialgsnapsho
t,gtakengatgagpointgingtime,gofgallgthegassetsgthegcompanygownsgandgallgthegclaimsgagainstgthos
egassets?
A) Incomegstatement
B) Creditor’sgstatement
C) Balancegsheet
D) Cashgflowgstatement
E) Sourcesgandgusesgstatement
15) Agbalancegsheetgreportsgthegvaluegofgagfirm’sgassets,gliabilities,gandgequity
A) overgangannualgperiod.
B) overganygperiodgofgtime.
C) atganygpointgingtime.
D) atgthegendgofgthegyeargonly.
, 16) Agcompanygsellsgusedgequipmentgwithgagbookgvaluegofg$100,000gforg$250,000gcash.gHo
wgwouldgthisgtransactiongaffectgthegcompany’sgbalancegsheet?
A) Equitygrisesg$250,000;gnetgplantgandgequipmentgfallsg$250,000.
B) Cashgrisesg$250,000;gnetgplantgandgequipmentgfallsg$100,000;gequitygrisesg$150,000.
C) Cashgrisesg$250,000;gaccountsgreceivablegfallsg$100,000;ggoodwillgrisesg$150,000.
D) Cashgrisesg$250,000;gnetgplantgandgequipmentgfallsg$250,000.
17) Agcompanygpurchasesgagnewg$10gmilliongbuildinggfinancedghalfgwithgcashgandghalfgwith
gagbankgloan.gHowgwouldgthisgtransactiongaffectgthegcompany’sgbalancegsheet?
A) Netgplantgandgequipmentgrisesg$10gmillion;gcashgfallsg$10gmillion;gbankgdebtgrisesg
$5gmillion.
B) Netgplantgandgequipmentgrisesg$5gmillion;gcashgfallsg$10gmillion;gbankgdebtgrisesg
$5gmillion.
C) Netgplantgandgequipmentgrisesg$5gmillion;gcashgfallsg$5gmillion;gbankgdebtgrisesg
$5gmillion.
D) Netgplantgandgequipmentgrisesg$10gmillion;gcashgfallsg$5gmillion;gbankgdebtgrisesg
$5gmillion.
18) Whichgonegofgthegfollowinggisgthegfinancialgstatementgthatgsummarizesgagfirm’sgreven
uegandgexpensesgovergagperiodgofgtime?
A) Incomegstatement
B) Balancegsheet
C) Cashgflowgstatement
D) Sourcesgandgusesgstatement
E) Marketgvaluegstatement
19) Thegsourcesgandgusesgofgcashgovergagstatedgperiodgofgtimegaregreflectedgingthe
