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(1)

Which of the following is excluded in calculating the quick ratio?

Short-term investments or Merchandise inventory

(2)

Which type of ratio is useful for measuring the ability of a business to meet

current debts as they come due?

Liquidity ratio or Profitability ratio

(3)

What is included in the numerator of the inventory turnover ratio?

Average inventory or Cost of goods sold

(4)

The times interest earned ratio consists of income before income taxes and

interest divided by:

Debt or Interest charges

(5)

The statement of cash flows reveals the cash generated or consumed by a firms

operating, investing, and financing activities.

True or False

(6)

Cash flow information provides signals about the maturity of a business, as well

as information about looming financial problems.

True or False

(7)

Which activities relate primarily to the production and sale of goods and services

and enter into the determination of income?

Operating Activities or Financing Activities

(8)

Which of the following would constitute a typical cash inflow from an investing

activity?

Sale of stocks of other firms or Issuance of stock

(9)

Which of the following would constitute a noncash investing/financing

transaction?

Exchanging land for stock or Issuance of stock

(10)

Significant noncash investing/financing transactions are reported on a statement

of cash flows prepared using either the direct method or:

The Indirect method or The Investing method

(11)

Which of the following approaches to preparing the statement of cash flows

translates income from the accrual basis to the cash basis?

The Direct method or The Indirect method

(12)

Cash received from customers can be calculated by starting with accrual basis

sales and adding:

Decreases in accounts receivable or Increases in Account Receivable

(13)

With the indirect approach to calculating cash flow from operating activities,

increases in current assets related to operations should be subtracted from the

accrual basis income figure.

True or False

(14)

In preparing a statement of cash flows, the proceeds from a disposal of

equipment should be reported as a cash inflow from investing activities.

True or False

(15)

Cash dividends paid are reported as a financing cash:

Inflow or Outflow

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