QUESTION 1

1. The Cash Flow Cycle includes which of the following activities:

   	A.	Setup
   	B.	Production
   	C.	Sales
   	D.	All of the above

0.4 points

QUESTION 2

1. The Pumice Stone Company has the following measurements ready for its Statement of Cash Flows:

   • Beginning Cash Balance $125,300
   • Acquisitions $400,000
   • Net cash flow from Operating Activities $297,600
   • Net cash flow from Investing Activities ($328,400) (negative/use)
   • Net cash flow from Financing Activities $250,000

   	A.	$344,500
   	B.	$232,600
   	C.	$55,700
   	D.	($205,100)

0.4 points

QUESTION 3

1. Free Cash Flow is defined as:

   	A.	A measure of ongoing cash flow from normal business activities (including CapEx)
   	B.	A list of dividend payments made to shareholders.
   	C.	Any cash flow given as bonus compensation to executives.
   	D.	Cash flows raised from debt and equity offerings.

0.4 points

QUESTION 4

1. Capital Expenditures is the amount spent for contract labor used in the business, and reported under Cash for Investing.

   True

   False

0.4 points

QUESTION 5

1. Which of the following transactions does NOT lower Cash:

   	A.	Paying salaries
   	B.	Paying for equipment
   	C.	Paying off a loan balance
   	D.	Receiving money from investors

0.4 points

QUESTION 6

1. Most small businesses, and all large ones, favor accrual basis books over cash basis books for all of the following reasons EXCEPT:

   	A.	Theyre concerned about the profit margin on products they sell.
   	B.	They want to know when theyre making money and when theyre not.
   	C.	Accrual basis accounting always shows a higher profit than cash basis of accounting.
   	D.	Theyre required by lenders, investors or government authorities to report their activities using accrual basis accounting

0.4 points

QUESTION 7

1. The BesTest Sprinkler Company engaged in the following Financing Activities during the year 2020:

   • Issuance of new Debt $ 10,000,000
   • Repayment of Debt $7,000,000
   • Payment of Dividends $750,000
   • Sale of Stock $2,500,000

   What are the Net Borrowings?

   	A.	$ 3,000,000
   	B.	$ 5,500,000
   	C.	$ 10,000,000
   	D.	$ 4,750,000

0.4 points

QUESTION 8

1. A cash flow statement is basically a reconciliation of the companys purchase log.

   True

   False

0.4 points

QUESTION 9

1. The Cash Flow Statement measures how much money, net of everything else, have I made this year, and how much will I have going forward next year, according to Jack Welch.

   True

   False

0.4 points

QUESTION 10

1. Earnings per Share is a more important financial measure than cash flow for private equity firms.

   True

   False