MULTIPLE CHOICE OR TRUE AND FALSE QUESTIONS (30 Points)

1. Cash and Cash equivalents are :

1. short-term highly liquid investments
2. readily convertible into cash
3. expected to mature within three months
4. all of the above
5. only a & b above

2. Cash control measures include:

1. routine review of accuracy of recorded xcash transactions
2. Separation of employees duties
3. Control over receipts
4. Control over payments
5. All of the above

3. T, F. Companies can sell their goods either for cash or on account which results in credit to sales revenue.
4. T, F. Sales Returns and allowances are contra accounts to Sales Revenue.
5. T, F. Allowance method for recognition of uncollectible accounts is better than direct write-off method because it matches revenues for the period with the expenses.
6. T, F. Companies finance their operations by selling their accounts receivable or borrowing against them without recourse.
7. The three analysis that common-size technique provides investors are:

1. Investing activity margin Profit margin
2. Operating margin
4. B and c only
5. None of the abov

8. The three types of activities that cash flow statement reports on are:

1. Operating activities
2. Investing activities
3. Financing activities
4. All of the above
5. Only a and b abov

9. Results from Discontinued operations are reported separately from results of continuing operations in order to:

1. Provide financial statement users useful information about operations that are active
2. Provide users with information about the performance of the company
3. Provide users with the basis to assess expectations of the continuing operations
4. All of the above
5. None of the abov