Quiz AC-5 - 11. Question: The final line item in a...

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11. Question: The final line item in a statement of cash flows is the __________. Your Answer: beginning of period cash balance. ( Incorrect. This is the next to last item on a statement of cash flows. ) end of period cash balance. ( CORRECT. The beginning of period cash balance is added to the net increase or net decrease in cash to arrive at the end of period cash balance. ) CORRECT net increase or net decrease in cash. ( Incorrect. There are two other line items that typically appear after this amount on the statement of cash flows. ) net cash provided by, or used by, financing activities. ( Incorrect. Although this is the last of the cash flow categories, it is not the last line item in the statement. ) Instructor Explanation: The final amount represents a stock rather than a flow. Points Received: 1 of 1 Comments: 12. Question: The payment of cash for treasury stock is considered a(n) __________ activity. Your Answer: operating ( Incorrect. The purchase of treasury stock does not affect net income and, therefore, is not an operating activity. ) investing ( Incorrect. Although the purchase of another company's stock is considered an investing activity, the purchase of a company's own stock is not. ) financing ( CORRECT. Since this is a cash flow related to stockholders' equity, it is considered a financing activity. ) CORRECT Instructor Explanation: Treasury stock is a company's own stock that it has repurchased. Points Received: 1 of 1 Comments: 13. Question: Investors and creditors would likely be most concerned about sustained negative cash flows in the __________ activities section Your Answer: operating ( CORRECT. Since this is the category that presents cash flows stemming from the company's central profit-directed activities, it is the most crucial to going concern status. This is one reason why this section always appears first in the statement. ) CORRECT investing ( Incorrect. Cash flows from investing activities are peripheral to the company's central profit-directed activities. ) financing ( Incorrect. Cash flows from investing activities are peripheral to the company's central profit-directed activities. ) Instructor Explanation: Consider which category is likely to impact the company's status as a going concern. Points Received:
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This note was uploaded on 06/20/2010 for the course FINA 6266 taught by Professor Burt during the Spring '10 term at University of Arkansas for Medical Sciences.

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Quiz AC-5 - 11. Question: The final line item in a...

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