Business activities that either generate or use cash are classified as operating

Question

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
17.
Premium on Bonds Payable is an increase to the liability account.
A) True
B) False
18.
Profitability is the company's ability to generate future revenues and meet long-term financial obligations.
A) True
B) False

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
11.
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
12.
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

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

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

Explanation / Answer

Business activities that either generate or use cash are classified as operating, investing or financing activities on the statement of cash flows. Answer:A) True

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