TRUE/FALSE
1.The balancing item in the statement of changes in financial statement was the change in the fund balance itself.
2.Only transactions having a direct effect on fund accounts were included in the statement of changes in financial position.
3.The balance sheet gives insight into the cash-generating potential of the operations of a firm.
4.An exit-price accounting system provides an estimate of the cash conversion value of a firm’s resources.
5.During the FASB’s deliberations that led up to the cash flow statement, a consensus emerged that funds should be defined as cash rather than net working capital mainly because net working capital transaction are more difficult to isolate than are cash transactions.
6.In the cash flow statement, cash is defined as literal cash on hand or on demand deposit plus cash equivalents.
7.SFAS No. 95 requires that all non-cash investing and financing transactions be reported in the body of the cash flow statement.
8.Use of the direct method on the cash flow statement frequently results in non-articulation.
9.The direct method requires a schedule reconciling net operating cash flow with net income.
10.Interest expense and long-term notes payable both appear in the financing section of the cash flow statement.
11.On the statement of cash flows, the proceeds from the sale of equipment would be classified as a financing activity.
12.On the statement of cash flows, the direct method reports literal cash flows related to income statement classifications.
13.On the statement of cash flows, the direct method starts with accrual income and adjust it for the non-cash items it contains.
14.With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.
15.Research is supportive of the contention that cash and funds flow data are informative above and beyond accrual date.