6332 pract exam 3 part 3 spring 2011

6332 pract exam 3 part 3 spring 2011 - Chapter 21 -...

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Unformatted text preview: Chapter 21 - Statement of Cash Flows Revisited Chapter 21 Statement of Cash Flows Revisited Multiple Choice Questions 21. Which of the following never requires an outflow of cash? A. Early extinguishment of debt. B. Retirement of common stock. C. Payment of dividends. D. Amortization of patent. AACSB: Reflective thinking Bloom's: Comprehension Learning Objective: 21-01 Explain the usefulness of the statement of cash flows. Level of Learning: Easy 23. All of the following may qualify as cash equivalents except: A. Money market accounts. B. Certificates of deposit. C. U.S. Treasury bills. D. Newly issued corporate bonds. AACSB: Reflective thinking Bloom's: Knowledge Learning Objective: 21-01 Explain the usefulness of the statement of cash flows. Level of Learning: Easy 25. How is the amortization of patents reported in a statement of cash flows that is prepared using the direct method? A. Not reported. B. An increase in cash flows from operating activities. C. A decrease in cash flows from operating activities. D. A decrease in cash flows from investing activities. AACSB: Analytic Bloom's: Analysis Learning Objective: 21-01 Explain the usefulness of the statement of cash flows. Level of Learning: Medium 21-1 Chapter 21 - Statement of Cash Flows Revisited 26 . When a transfer is made between cash and cash equivalents with no gain or loss, how is the transaction treated in the statement of cash flows? A. It is included as an operating activity. B. It is included as a noncash financing activity. C. It is included as an investing activity. D. It is not reported. AACSB: Analytic Bloom's: Analysis Learning Objective: 21-01 Explain the usefulness of the statement of cash flows. Level of Learning: Medium 28. A firm reported ($ in millions) net cash inflows (outflows) as follows: operating $75, investing ($200), and financing $350. The beginning cash balance was $250. What was the ending cash balance? A. $875. B. $25. C. $475. D. $125. $75 - $200 + $350 + $250 = $475 AACSB: Analytic Bloom's: Application Learning Objective: 21-01 Explain the usefulness of the statement of cash flows. Level of Learning: Medium 29. Cash equivalents generally would not include short-term investments in: A. Commercial paper. B. Certificates of deposit. C. Held-to-maturity securities. D. Money market funds. AACSB: Reflective thinking Bloom's: Comprehension Learning Objective: 21-02 Define cash equivalents. Level of Learning: Easy 21-2 Chapter 21 - Statement of Cash Flows Revisited 30. Cash equivalents have each of the following characteristics except: A. Little risk of loss. B. Highly liquid. C. Maturity of at least 3 months. D. Short-term. AACSB: Reflective thinking Bloom's: Comprehension Learning Objective: 21-02 Define cash equivalents....
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This note was uploaded on 06/16/2011 for the course ACCT 6325 taught by Professor Charles during the Spring '11 term at University of Texas at Dallas, Richardson.

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6332 pract exam 3 part 3 spring 2011 - Chapter 21 -...

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