Post ACC305 Unit 7 Self Quiz Chapter 10-11

Question 1

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The income statement does not fairly represent the cash from operations.

Question 2

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Depreciation expense reduces operating income but does not require the use of cash.

Question 3

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The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.

Question 4

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The income statement fairly represents the cash from operations.

The income statement does not fairly represent the cash from operations.

Question 5

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Cash flow per share can be viewed as a substitute for earnings per share in terms of a firm's profitability.

Question 6

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The acquisition of land using notes payable is an example of a cash transaction.

Question 7

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Most of the ratios given a high significance rating by commercial loan officers have a primary measure of liquidity or debt.

Question 8

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Presently, no regulatory agency, such as the Securities and Exchange Commission or the Financial Accounting Standards Board, accepts responsibility for determining either the content of financial ratios or the format of presentation in annual reports.

Question 9

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With the Altman model, the higher the Z score, the more likely the firm will go bankrupt.

Question 10

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An auditor can use financial ratios in analytical review procedures.