1.The statement of cash flows has four main sections, one each for operating, investing, and financing activities, and one that shows a summary of the cash and cash equivalents at the end of the year.

a. True
b. False

2. The Operating Cycle (OC) of a firm is the amount of time from the point when the firm begins to build inventory to the point in time when cash is collected from the sale of the resulting finished product i.e. OC = Average Age of Inventory (AII) + Average Collection Period (ACP).

a.True

b.False

3. The concept of permanent current assets reflects the fact that some components of current assets do not shrink to zero even when a business is at its seasonal or cyclical low. Thus, permanent current assets represent a minimum level of current assets that must be financed.

a. True
b. False