CSO: 1A1a LOS: 1A1a

 

The financial statements included in the annual report to the shareholders are least useful to which one of the following?

 

a. Stockbrokers.

 

b. Bankers preparing to lend money.

 

c. Competing businesses.

 

d. Managers in charge of operating activities.

 

2. CSO: 1A1d LOS: 1A1e

 

Which one of the following would result in a decrease to cash flow in the indirect method of preparing a statement of cash flows?

 

a. Amortization expense.

 

b. Decrease in income taxes payable.

 

c. Proceeds from the issuance of common stock.

 

d. Decrease in inventories.

 

3. CSO: 1A1c LOS: 1A1b

 

The statement of shareholders’ equity shows aa. reconciliation of the beginning and ending balances in shareholders’ equity accounts.

 

b. listing of all shareholders’ equity accounts and their corresponding dollar amounts.

 

c. computation of the number of shares outstanding used for earnings per share calculations.

 

d. reconciliation of the beginning and ending balances in the Retained Earnings account.

 

4. CSO: 1A1d LOS: 1A1b

 

When using the statement of cash flows to evaluate a company’s continuing solvency, the most important factor to consider is the casha. balance at the end of the period.

 

b. flows from (used for) operating activities.

 

c. flows from (used for) investing activities.

 

d. flows from (used for) financing activities.

 

5. CSO: 1A1a LOS: 1A1b

 

A statement of financial position provides a basis for all of the following excepta. computing rates of return.

 

b. evaluating capital structure.

 

c. assessing liquidity and financial flexibility.

 

d. determining profitability and assessing past performance.