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8.The statement of changes in financial position reported on:a.Changes in current assets and current liabilities.b.Changes in assets.c.Changes in assets, liabilities, and owners' equity account balancesd.Changes in working capitalANSWER: C9.Most firms elected to define funds in the statement of changes in financial position as:10.With SFAS No. 95 defining funds as cash, the FASB has:Accounting Theory: 8theditionPage 4 of 10
Chapter 13—STATEMENTS OF CASH FLOWS11.The funds flow statement included:12.APB Opinion No. 19 permitted fund balance accounts in the statement of changes in financial position to include which of the following?a.Quick assets onlyb.Cash and near cash onlyc.Working capital onlyd.Cash, cash and near cash, quick assets, or working capitalANSWER: D13.Which of the following is nota function of financial statements as stated in the text?14.For capital budgeting purposes, an investment is acceptable if:15.A FASB discussion memorandum suggested that cash flow data are a useful supplemental disclosure for all of the following reasons except:16.Which of the following is a true statement?a.Liquidity is the ability of the firm to adapt to new situations and opportunities.b.Cash flow measurement is more uniform than income measurement.c.The current-noncurrent classification system in the balance sheet is a good guide to liquidity.d.The balance sheet gives insight into the cash-generating potential of operations.ANSWER: BAccounting Theory: 8theditionPage 5 of 10