1. The cash flows to total liabilities ratio measures

a. the percentage of a companys current liabilities that could be met with one years investing cash flows.

b. the percentage of a companys long-term liabilities that could be met with one years operating cash flows

c. the percentage of a companys total liabilities that could be met with one years operating cash flows.

d. the percentage of a companys current liabilities that could be met with one years financing cash flows.

2. Which of the following would be an example of a financing activity on the Statement of Cash Flows?

a. payment of rent to landlord

b. repayment of a loan from another company

c. receipt of interest on investments

d. sale of equipment

3. The cash account may have a credit balance when

a. this is not possible; the normal balance for the cash account is a debit.

b. the company only has cash equivalents and no demand deposits.

c. the company has used its bank overdraft facility.

d. all of the companys cash is tied up in Accounts Receivable and Inventory.