FINANCIAL ACCOUNTING AND REPORTING 3

MULTIPLE CHOICE

33. Supplemental disclosures required only when the statement of cash flows is prepared using the indirect method include a. a schedule reconciling net income with net cash provided by (used in) operating activities. b. amounts paid for interest and taxes. c. amounts deducted for depreciation and amortization. d. significant noncash investing and financing activities. 34. The most likely situation in which reported earnings are positive, but operations are consuming rather than generating cash would be: a. a rapidly growing company. b. a company reporting large noncash expenses. c. a company using very conservative accounting standards that lower earnings. d. a company paying large cash dividends to its shareholders. 35. Which of the following is the most recent statement required by professional standards? a. Balance sheet c. Statement of cash flows b. Income statement d. Statement of changes in financial position 36. Which of the following is true? a. The FASB requires dividends paid to be classified as an operating activity. b. The FASB requires interest paid to be classified as a financing activity. c. The FASB allows dividends paid to be classified as an operating activity or as a financing activity. d. The IASC allows dividends paid to be classified as an operating activity or as a financing activity 37. Which of the following is true? a. The IASC requires eight cash flow categories. b. The Accounting Standards Board of the United Kingdom requires eight cash flow categories. c. The IASC does not specifically require a fixed number of cash flow categories. d. The Accounting Standards Board of the United Kingdom requires three cash flow categories.