1.A successful business must generate most of its cash from:

A.

financing activities.

B.

investing activities.

C.

operating activities.

D.

noncash investing and financing activities.

2.The three types of activities reported on the statement of cash flows are presented in the following order:

A.

investing, operating, and financing.

B.

financing, operating, and investing.

C.

operating, investing, and financing.

D.

financing, investing, and operating.

3. Depreciation expense is added to net income when reconciling net income to net cash provided by operating activities because it:

A.

conserves cash outflows for taxes.

B.

represents a cash inflow.

C.

is a tax deduction that reduces the payment of taxes.

D.

reduces net income but has no effect on cash, so we add depreciation expense to net income to cancel the deduction.

4. Reimer Company reports the following data:

2017

2016

Sales

100%

100%

Cost of Goods Sold

26%

16%

Gross Profit

74%

84%

Operating Expenses

35%

30%

Net Income

39%

54%

When evaluating the results of operations, what can be said about Reimer Company?

A.

Using vertical analysis, the company's profitability declined in 2016.

B.

Using horizontal analysis, the company's profitability declined in 2017.

C.

Using horizontal analysis, the company's profitability declined in 2016.

D.

Using vertical analysis, the company's profitability declined in 2017.

5. Horizontal analysis is performed on information from:

A.only the balance sheet.

B.

only the income statement.

C.

only the statement of cash flows.

D.

the income statement, the balance sheet, and the statement of cash flows.