Chapter 3 Question and answers rated A+ 2025/2026
1. Although are often poor reflections of re- accounting numbers
ality, they are often the best information
avail- able.
2. At the most fundamental level, firms spend it
generate cash and:
3. Which of the following are uses of cash? (Check -Increases in property, plan
and
all that apply.) equipment
-Decreases in accounts payable
Decreases in accounts payable
-Increases in inventory
Increases in inventory
Increases in property, plant and equipment
Decreases in accounts receivable
Decreases in property, plant and
equipment
False
4. True or false: There is only one method
for preparing the statement of cash
flows. Standardized
5. financial statements provide for
com- parison of firms that differ in
currency type.
6. Because we are almost always unable to obtain accounting
all of the market information we want, we
rely on numbers for much of our
financial in- formation.
7. A performance indicator is a 8. At the most
measurable value that shows how fundamental level,
effectively a company is achieving firms generate
business objectives. and spend it.
1/
22
,key
cash
2/
22
, Chapter 3
Study online at https://quizlet.com/_bxif3k
9.Which one of the following is one way in which To track changes
in a firm's capital
financial managers use a common-size balance structure
sheet?
10.Which of the following are sources of A decrease in
cash? accounts receivable
Purchasing an asset An increase in notes payable
A decrease in accounts
receivable A decrease in
notes payable
An increase in notes payable
11. The statement of cash flows The statement of cash flows
summarizes the sources and uses of summa- rizes the sources and
cash, though which of the following is uses of cash, though which of the
true of the statement? following is true of the
statement?
12. A common-size balance sheet total assets.
expresses ac- counts as a percentage
of:
decision making
13. An important accounting goal is to
report fi- nancial information to users
in a way that is useful for .
14. If a company's common-size income statement raised its prices relative to
costs
shows a lower percentage for cost of
goods sold this period compared to
last period, the company may be
controlling its costs well or it has .
15. A(n) is a measurable value that shows how KPI (Key Performance
Indicator)
3/
22
1. Although are often poor reflections of re- accounting numbers
ality, they are often the best information
avail- able.
2. At the most fundamental level, firms spend it
generate cash and:
3. Which of the following are uses of cash? (Check -Increases in property, plan
and
all that apply.) equipment
-Decreases in accounts payable
Decreases in accounts payable
-Increases in inventory
Increases in inventory
Increases in property, plant and equipment
Decreases in accounts receivable
Decreases in property, plant and
equipment
False
4. True or false: There is only one method
for preparing the statement of cash
flows. Standardized
5. financial statements provide for
com- parison of firms that differ in
currency type.
6. Because we are almost always unable to obtain accounting
all of the market information we want, we
rely on numbers for much of our
financial in- formation.
7. A performance indicator is a 8. At the most
measurable value that shows how fundamental level,
effectively a company is achieving firms generate
business objectives. and spend it.
1/
22
,key
cash
2/
22
, Chapter 3
Study online at https://quizlet.com/_bxif3k
9.Which one of the following is one way in which To track changes
in a firm's capital
financial managers use a common-size balance structure
sheet?
10.Which of the following are sources of A decrease in
cash? accounts receivable
Purchasing an asset An increase in notes payable
A decrease in accounts
receivable A decrease in
notes payable
An increase in notes payable
11. The statement of cash flows The statement of cash flows
summarizes the sources and uses of summa- rizes the sources and
cash, though which of the following is uses of cash, though which of the
true of the statement? following is true of the
statement?
12. A common-size balance sheet total assets.
expresses ac- counts as a percentage
of:
decision making
13. An important accounting goal is to
report fi- nancial information to users
in a way that is useful for .
14. If a company's common-size income statement raised its prices relative to
costs
shows a lower percentage for cost of
goods sold this period compared to
last period, the company may be
controlling its costs well or it has .
15. A(n) is a measurable value that shows how KPI (Key Performance
Indicator)
3/
22
