Learning Objective 9-1
1) The statement of cash flows ________.
A) reports all of the cash a company has received and all of the cash a company has disbursed during an accounting period
B) reports all of the income, expenses, and profit or losses a company has earned or incurred during an accounting period
C) reports the amount of assets, liabilities, and shareholders’ equity of a business
D) reports all of the income, dividends, and retained earnings of a business
2) The statement of cash flows reports ________.
A) all of the cash a company has received and all of the cash a company has disbursed during an accounting period
B) all of the income, expenses, profit or losses a company has earned or incurred during an accounting period
C) the change in total assets during an accounting period
D) all of the sources and uses of shareholders’ equity
3) The statement of cash flows does
NOT
report cash flows from ________.
A) operating activities
B) investing activities
C) financing activities
D) budgeting activities
4) A statement
NOT
required by FASB to comply with GAAP is ________.
A) a balance sheet
B) an income statement
C) a statement of cash flows
D) a cash budget
5) The statement of cash flows reports the ________.
A) sources and uses of cash
B) financial position of a company
C) changes in shareholders’ equity
D) profitability of a company
6) A cash budget ________.
A) reports cash inflows and outflows from operating, investing, and financing activities
B) is a detailed plan of a company’s estimated cash receipts and disbursements
C) is prepared using the indirect method
D) is prepared using the direct method
7) Cash budgets allow companies to plan for any cash shortage by ________.
A) securing a line of credit from a local bank
B) borrowing money
C) altering the timing of receipts or disbursements
D) all of these
8) The preparation of cash budgets includes ________.
A) estimating in detail the amount and the timing of cash receipts and disbursements
B) categorizing cash inflows and outflows by operating, financing, and investing activities
C) securing a line of credit from a bank
D) all of these
9) The cash budget ________.
A) is one of the financial statements required by the SEC and FASB
B) is used by management to anticipate any cash flow shortages
C) has three sections: operating, investing, and financing
D) all of these
10) Preparation of the cash budget starts ________.
A) with net income and makes adjustments for all the items that are not cash
B) by converting every number on the income statement to its cash amount
C) by estimating the sources of cash and the uses of cash
D) with cash collected from customers