1.Business activities that either generate or use cash are classified as operating, investing or financing activities on the statement of cash flows.
A) True
B) False
2.Premium on Bonds Payable is an increase to the liability account.
A) True
B) False
3.Profitability is the company's ability to generate future revenues and meet long-term financial obligations.
A) True
B) False
4.A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements.
A) True
B) False
5.General standards or guidelines of comparisons include the 2 to 1 for the current ratio and 1 to 1 for the acid-test ratio.
A) True
B) False
6.A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 times the days in its credit period.
A) True
B) False
7.The payment pattern for installment notes that consists of accrued interest plus equal amounts of principal yields cash flows of equal amounts over the life of the note.
A) True
B) False
8.The cash flow on total assets ratio reflects the company's actual cash flows and therefore, is affected by the accounting constraints of recognition and measurement for net income.
A) True
B) False