1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explain the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? C. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities?

1. Answer the following questions for the directors: A. True or false, does the statement of cash flows explain the difference between net income and the change in the cash balance? B. True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? C. True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans? D. True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The statement of cash flows is not useful for a.determining a company’s ability to pay its debts b.planning future investing and financing activities c.calculating the net worth of a company d.determining a company’s ability to pay dividends
How can a company's investing and financing activities impact its cash flow statement? Provide examples of how a company might use different types of financing or investing activities to improve its cash flow.
Read the following statements regarding financial statements. Select the correct statement(s). A. The income statement of a company indicates whether it is making or losing money during a financial period. B. The cash flow statement provides information on how the company generated cash and how the used its cash during the reporting period. company C. A company's working capital is the current liabilities minus the current assets of the company. D. The earnings per share (EPS) can be calculated from information provided by the financial statements by dividing earnings available to common stockholders (shareholders) by the number of shares of common stock outstanding. Mark for Review What's This?
Which of the following is not classified among the financing activities in a statement of cash flows? a Long-term borrowing. b Payment of dividends to stockholders. c Short-term borrowing. d Payment of interest to creditors.
Which of the statements is NOT TRUE about the Statement of Cash Flows?a) Collection of receivables is an operating activityb) Payment of suppliers is a financing activityc) Issuing new shares is a financing activityd) Purchase of Machinery & Equipment is an investing activity
Which of the following is an example of a cash flow from an investing activity? Group of answer choices receipt of cash from the sale of equipment receipt of cash from the sale of stock payment of cash for dividends payment of cash to acquire treasury stock
Which of the following is not a use of the statement of cash flows? a. Aids in the prediction of future cash flow. b. Provides a measure of the future obligations of the company. c. Helps estimate the amount of funds that will be needed from creditors or shareholders. d. Provides insights into the quality and reliability of reported income.
The statement of cash flows answers such questions as "Where does a company spend Its cash?" and "How does a company receive its cash? True or False True False
Assuming Sherban reports dividends paid as a financing activity: Calculate net cash flow from operating activities. Use a proper three-line title. Calculate Sherban’s current cash debt coverage ratio, cash debt coverage ratio and free cash flow. Using your answers in part (b) and comment on Sherban’s liquidity and financial flexibility. Under IFRS, how else might Sherban account for cash dividends paid in the cash flow statement?
Which of the following represents a form of communication through financial reporting but not tgh final A) Management Forecasts B) Notes to financial statements C) Statement of Cash Flows D) Statement of financial position
Which of the following is NOT TRUE about the Statement of cashflowsa) is prepared on cash basisb) is comprised of three parts named, cash from operations, cash from investments and cash from financingc) is one of the basic financial statementsd) is an instrument for analyzing the financial structure a company
O Balance sheet In analyzing a company's financial statements, which financial statement would a potential investor primarily use to assess the company's liquidity and financial fiexibility? O Income statement O Staterment of retained earnings Statement of cash flows