CHAPTER 5BALANCE SHEET AND STATEMENT OF
CHAPTER 5
BALANCE SHEET AND STATEMENT OF CASH FLOWS
IFRS questions are available at the end of this chapter.
TRUe-FALSE—Conceptual
Answer No. Description F 1. Liquidity and solvency. T 2. Limitations of the balance sheet. T 3. Definition of financial flexibility. T 4. Long-term liability disclosures. F 5. Definitions of the balance sheet. F 6. Land held for speculation. T 7. Balance sheet format. F 8. Disclosure of fair values. F 9. Disclosure of company operations and estimates. T 10. Disclosure of pertinent information. F 11. Use of the term reserve. F 12. Adjunct account. F 13. Purpose of statement of cash flows. F 14. Statement of cash flows reporting. T 15. Financial flexibility. T 16. Collection of a loan. T 17. Determining cash provided by operating activities. F 18. Reporting significant financing and investing activities. T 19. Current cash debt coverage ratio. F 20. Reporting other comprehensive income.
Multiple Choice—Conceptual
Answer No. Description d 21. Limitation of the balance sheet. c 22. Uses of the balance sheet. b 23. Use of balance sheet information. d 24. Use of balance sheet information. d 25. Limitation of the balance sheet. c S26. Uses of the balance sheet. b S27. Criticisms of the balance sheet. c P28. Definition of liquidity. d 29. Definition of net assets. b 30. Current assets presentation. b 31. Operating cycle. d 32. Operating cycle. d 33. Identification of current asset. d 34. Identification of current asset. d 35. Identification of current asset. d 36. Classification of short-term investments. c 37. Classification of inventory pledged as security.
Multiple Choice—Conceptual (cont.)
Answer No. Description b 38. Identification of long-term investments. d 39. Identification of valuation methods. b 40. Identification of current liabilities. d 41. Definition of working capital. b 42. Identification of working capital items. d 43. Identification of long-term liabilities. d 44.
BALANCE SHEET AND STATEMENT OF CASH FLOWS
IFRS questions are available at the end of this chapter.
TRUe-FALSE—Conceptual
Answer No. Description F 1. Liquidity and solvency. T 2. Limitations of the balance sheet. T 3. Definition of financial flexibility. T 4. Long-term liability disclosures. F 5. Definitions of the balance sheet. F 6. Land held for speculation. T 7. Balance sheet format. F 8. Disclosure of fair values. F 9. Disclosure of company operations and estimates. T 10. Disclosure of pertinent information. F 11. Use of the term reserve. F 12. Adjunct account. F 13. Purpose of statement of cash flows. F 14. Statement of cash flows reporting. T 15. Financial flexibility. T 16. Collection of a loan. T 17. Determining cash provided by operating activities. F 18. Reporting significant financing and investing activities. T 19. Current cash debt coverage ratio. F 20. Reporting other comprehensive income.
Multiple Choice—Conceptual
Answer No. Description d 21. Limitation of the balance sheet. c 22. Uses of the balance sheet. b 23. Use of balance sheet information. d 24. Use of balance sheet information. d 25. Limitation of the balance sheet. c S26. Uses of the balance sheet. b S27. Criticisms of the balance sheet. c P28. Definition of liquidity. d 29. Definition of net assets. b 30. Current assets presentation. b 31. Operating cycle. d 32. Operating cycle. d 33. Identification of current asset. d 34. Identification of current asset. d 35. Identification of current asset. d 36. Classification of short-term investments. c 37. Classification of inventory pledged as security.
Multiple Choice—Conceptual (cont.)
Answer No. Description b 38. Identification of long-term investments. d 39. Identification of valuation methods. b 40. Identification of current liabilities. d 41. Definition of working capital. b 42. Identification of working capital items. d 43. Identification of long-term liabilities. d 44.