Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term assets?

the investing activities section

the operating activities section

the financing activities section

the non-cash investing and financing section

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Question 67

2 pts

The payment of interest on a loan is considered a ________ on a statement of cash flows prepared using the direct method.

cash outflow for financing activities

cash outflow for operating activities

non-cash activity

cash outflow for investing activities

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Question 68

2 pts

The statement of cash flows helps users ________.

evaluate the company's earnings per share

predict future net income

predict the growth of a company's assets

evaluate management decisions

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Question 69

2 pts

One of the purposes of the statement of cash flows is to ________.

evaluate the level of debt and leverage of a company

predict the ability of a company to pay debts and dividends

determine the operating income of a business

to calculate inventory turnover

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Question 70

2 pts

Which of the following is considered an operating activity on the statement of cash flows prepared using the direct method?

the receipt of cash from sale of equipment

dividends paid to stockholders

sale of merchandise inventory for cash

payment to purchase equipment

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Question 71

2 pts

Which of the following is true of the statement of cash flows?

It shows how the profits or losses of the company were generated.

It reports on the qualitative behavior of the company's performance.

It indicates when long-term debt will mature.

It covers a span of time and is dated the same as the income statement.

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Question 72

2 pts

Which of the following is used to determine how the sales revenue of a company has changed from one year to the next?

horizontal analysis of the balance sheet

vertical analysis of the balance sheet

horizontal analysis of the income statement

vertical analysis of the income statement

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Question 73

2 pts

When performing vertical analysis of a balance sheet, the base amount is ________.

total cash and cash equivalents

net income

total assets

gross profit

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Question 74

2 pts

Which of the following best describes horizontal analysis?

comparing financial statement amounts from year to year for the same company

comparing a company's financial statements with other companies

calculating key ratios to evaluate performance

expressing each financial statement amount as a percentage of a budgeted amount

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Question 75

2 pts

Which of the following is used to see how a company's operating expenses, as a percentage of net sales, have changed from one year to the next?

analysis of internal control system

horizontal analysis

vertical analysis

ratio analysis