14. The balance sheet is useful for analyzing all of the following exeept financial flexibility. B) profitability. C) liquidity. D) solvency. 15. Collection of a loan is reported as an investing activity in the statement of cash flows. A) True B) False The major elements of the income statement are A) revenues, irregular items, and general expenses. B) revenue, cost of goods sold, selling expenses, and general expense. C) operating section, nonoperating section, discontinued operations, extraordinary items, 16. and cumulative effect. D) revenues, expenses, gains, and losses. 17. Which of the following is true about intraperiod tax allocation? A) It is required for extraordinary items and cumulative effect of accounting changes but not for prior period adjustments. Its purpose is to allocate income tax expense evenly over a number of accounting periods. Its purpose is to relate the income tax expense to the items which affect the amount of tax. B) C) D) It arises because certain revenue and expense items appear in the income statement either revenue before or after they are included in the tax return. 18. The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as A) exchangeability. B) liquidity. C) solvency. D) financial flexibility. 19. Which of the following statements is true about the accrual basis of accounting? A) A minimal amount of record keeping is required in accrual basis accounting compared to B) This method is used less frequently by businesses than the cash method of accounting C) Revenues are recognized in the period the performance obligation is satisfied, regardless cash basis of the time period the cash is received. The timing of cash receipts and disbursements is emphasized. D)