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Unformatted text preview: 26. Question: The payment of dividends to shareholders is considered an investing activity. Your Answer: True False CORRECT Instructor Explanation: A dividend payment relates to stockholders' equity. Points Received: 1 of 1 Comments: 27. Question: Like the income statement, the statement of cash flows covers a period of time. Your Answer: True CORRECT False Instructor Explanation: The period is always part of the heading on a Statement of Cash Flows. Points Received: 1 of 1 Comments: 28. Question: One of the purposes of a statement of cash flows is to determine a company's ability to pay its debts when they become due. Your Answer: True CORRECT False Instructor Explanation: Even profitable companies must have sufficient liquidity to continue in business. Points Received: 1 of 1 Comments: 29. Question: The payment of interest on debt is considered an operating activity. Hint: Consider how you would account for the payment of interest. What category of activity would this fall under?Hint: Consider how you would account for the payment of interest....
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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.
- Spring '10