TEST BANK FOR Analysis for Financial Management 13th Edition by Robert C. Higgins, Jennifer Koski, Todd Mitton ISBN: 978-1260772364 COMPLETE GUIDE ALL CHAPTERS COVERED 100% VERIFIED A+ GRADE ASSURED!!!!NEW LATEST UPDATE!!!!

,Test Bank for Analysis For Financial Management 13th Edition Robert Higg
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ins, Jennifer Koski, Todd Mitton
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Student name: x#




TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
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1) Current liabilities are defined as liabilities with a maturity of less than one year.
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⊚ true
⊚ false



2) A decline in the Net Property, Plant, and Equipment account between year-
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end 2020 and year-end 2021 is a clear indication that fixed assets were sold during 2021.
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⊚ true
⊚ false



3) When reporting financial performance for tax purposes, U.S. companies prefer to u
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se accelerated depreciation methods over the straight-line method.
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⊚ true
⊚ false



4) Accounting rules require U.S. companies to depreciate research and development (R&
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D) expenditures using the straight-line method.
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⊚ true
⊚ false



5) You can construct a sources and uses statement for 2021 if you have a company’s ye
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ar- end balance sheets for 2021 and 2022.
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⊚ true
⊚ false



6) A reduction in long-term debt is a use of cash.
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⊚ true
⊚ false

,7) The accrual principle requires that revenue not be recognized until payment from a sale
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is received.
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⊚ true
⊚ false



8) An increase in cash and cash equivalents should appear as a use of cash on the sour
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ces and uses statement.
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⊚ true
⊚ false



9) A cash flow statement places each source or use of cash into one of three bro
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ad categories: operating activities, investing activities, or financing activities.
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⊚ true
⊚ false



10) The cost of equity is usually reported on the income statement right below inter
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est expense.
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⊚ true
⊚ false



11) The United States was one of the first countries to adopt International Financi
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al Reporting Standards.
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⊚ true
⊚ false



MULTIPLE CHOICE - x# x#



Choose the one alternative that best completes the statement or answers the question.
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12) Which of the following statements concerning a firm’s cash flows and profits is false?
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, A) Managers must be at least as concerned with cash flows as with profits.
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B) A company that sells merchandise at a profit can be assured of generating cash so
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on enough to replenish cash flows required for continued production.
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C) The cash flows generated in a given time period can differ from the profits reported.
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D) Profits are no assurance that cash flow will be sufficient to maintain solvency.
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E) Due to required cash investments in current assets, fast-
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growing and profitable companies can literally “grow broke”.
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13) Which of the following is NOT a typical reason for differences between profits and ca
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sh flow?
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A) Goodwill
B) Depreciation expense x#


C) Changes in accounts receivable x# x# x#



D) Accrual accounting practices x# x#




14) Which one of the following is the financial statement that shows a financial snapsh
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ot, taken at a point in time, of all the assets the company owns and all the claims against
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those assets?
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A) Income statement x#



B) Creditor’s statement x#



C) Balance sheet x#


D) Cash flow statement x# x#



E) Sources and uses statement x# x# x#




15) A balance sheet reports the value of a firm’s assets, liabilities, and equity
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A) over an annual period. x# x# x#



B) over any period of time.x# x# x# x#



C) at any point in time.
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D) at the end of the year only.
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