Financial and Managerial Accounting, 9th Edition Test Bank - The Managerial Chapters - Miller, Poindexter & Mattison

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3,785 Questions with Answers • Managerial Chapters

Financial and Managerial Accounting: Managerial Chapters, 9e
(Miller/Poindexter/Mattison)
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Learning Objective M:B-1

1) The balance sheet shows why cash increased or decreased.
Answer: FALSE
Explanation: The balance sheet does not show why cash increased or decreased.
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

2) The statement of cash flows shows where cash came from and how cash was spent.
Answer: TRUE
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

3) The statement of cash flows is dated the same as the balance sheet.
Answer: FALSE
Explanation: The statement of cash flows is dated the same as the income statement.
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

4) A business's cash receipts and cash payments for a specific period are reported on a(n):
A) income statement.
B) balance sheet.
C) statement of cash flows.
D) cash reconciliation statement.
Answer: C
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

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,5) Which of the following is true of the statement of cash flows?
A) It indicates when long-term debt will mature.
B) It reports on the qualitative behavior of the company's performance.
C) It covers a span of time and is dated the same as the income statement.
D) It shows how the profits or losses of the company were generated.
Answer: C
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

6) The statement of cash flows reports on:
A) where cash came from and how cash was spent.
B) the company's financial position.
C) the changes in retained earnings.
D) the company's profits.
Answer: A
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

7) The statement of cash flows tells us:
A) the company's financial position.
B) the net income or net loss.
C) why cash increased or decreased.
D) that the accounting equation is in balance.
Answer: C
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2: What Is the Statement of Cash Flows? (H1)




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,8) The statement of cash flows covers a span of time:
A) and is dated the same as the income statement.
B) for the period after the income statement and is dated the period after the income statement.
C) and is dated and reports on the retained earnings of the business.
D) for the next financial reporting period.
Answer: A
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: What Is the Statement of Cash Flows? (H1)

9) The balance sheet tells us:
A) the company's financial position.
B) whether cash increased or decreased, but not why.
C) both A and B are correct.
D) neither A nor B is correct.
Answer: C
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2: What Is the Statement of Cash Flows? (H1)

10) The statement of cash flows explains why net income as reported on the income statement does not
equal the change in the cash balance.
Answer: TRUE
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows

11) Investors and management use the statement of cash flows to evaluate a firm's profitability.
Answer: FALSE
Explanation: Investors and creditors use the statement of cash flows to evaluate managers' decisions.
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows




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, 12) The statement of cash flows is the link between the accrual-based income statement and the cash
reported on the balance sheet.
Answer: TRUE
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows

13) The statement of cash flows helps users:
A) predict future net income.
B) evaluate management decisions.
C) evaluate the company's earnings per share.
D) predict the growth of a company's assets.
Answer: B
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows

14) One of the purposes of the statement of cash flows is to:
A) determine the operating income of a business.
B) calculate inventory turnover.
C) evaluate the level of debt and leverage of a company.
D) predict the ability of a company to pay debts and dividends.
Answer: D
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows

15) Which of the following statements accurately describes the statement of cash flows?
A) It shows the relative proportion of debt and assets.
B) It is the link between the accrual-based income statement and the cash reported on the balance sheet.
C) It indicates when long-term debt will mature.
D) It is the link between net income and earnings per share.
Answer: B
Diff: 1
LO: M:B-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Purpose of the Statement of Cash Flows

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