1) A company's ability to minimize inventory shrinkage and keep inventory moving is reflected in the:

a.payout ratio.

b.gross profit margin.

c.free cash flow.

d.current ratio.

2) The investing and financing activities sections of the cash flow statement are ______ for both the direct and indirect methods.

a.the same

b.different

c.the same for the investing but not the financing activities section

d.the same for the financing but not the investing activities section

3) Which of the following is a current asset?

a.Investment in associates (significant influence investments).

b.Cash designated for the purchase of property, plant and equipment.

c.Trade installment receivables normally collectible in eighteen months.

d.Intangible assets.

4) Which of the following should NOT be considered current assets in the statement of financial position?

a.Equity or debt securities purchased with cash available for current operations.

b.Prepaid taxes, which cover assessments for the current year.

c.Franchises and copyrights.

d. Installment notes receivable due over eighteen months, in accordance with normal trade practice.

5) Which of the following is a limitation of the balance sheet?

a.Many items that are of financial value are omitted.

b. Judgement and estimates are used.

c.Current fair value is not reported.

d.All of these answer choices are correct.