11) A statement of cash flows accomplishes all of the following EXCEPT:
A) reveals the ability of the company to pay dividends and interest.
B) provides information about the cash receipts and cash payments during a period.
C) lists revenues and expenses.
D) predicts future cash flows.
12) Highly liquid short-term investments that are easily convertible into cash are called:
A) trading securities.
B) cash equivalents.
C) current assets.
D) accounts receivable.
13) Creditors analyze the statement of cash flows to determine:
A) total interest earned during the period.
B) the quality of the company's earnings.
C) whether or not the company can pay interest on debt.
D) if management was overpaid.
14) The statement of cash flows will NOT report:
A) cash payments in the current year.
B) cash receipts in the current year.
C) noncash investing and financing activities.
D) revenues and expenses for the current year.
15) The statement of cash flows is designed to fulfill all the following purposes EXCEPT to:
A) show the relationship of net income to changes in the company's cash.
B) assess the collectability of accounts receivable.
C) evaluate management decisions.
D) help predict future cash flows.
16) Which financial statements cover a period of time?
A) Income Statement only
B) Income Statement and Statement of Stockholders' Equity
C) Income Statement, Statement of Stockholders' Equity and Statement of Cash Flows
D) Income Statement, Statement of Stockholders' Equity, Statement of Cash Flows and Balance Sheet
17) What is(are) good predictors of future cash flows?
A) net income in past year
B) net income in current year
C) past cash receipts and past cash payments
D) cash receipts and cash payments in the current year
18) The statement of cash flows provides information about:
A) a company's ability to pay interest and dividends.
B) a company's future cash flows.
C) decisions made by a company's management.
D) all of the above.