5.Whenafirmpaysoffaloanusingcash,thesourceoffundsisthedecreaseintheassetaccount,cash,whiletheuse offundsinvolvesa decreaseina liabilityaccount,debt. a.True True ANSWER: Easy DIFFICULTY: Sourcesanduses TOPICS: 6.Non-cashassetsareexpectedtoproducecashovertimebuttheamountofcashtheyeventuallyproducecouldbe higherorlowerthanthevaluesatwhichtheassetsarecarriedonthebooks. a.True b.False True ANSWER: Easy DIFFICULTY: Non-cashassets TOPICS: 7.Taxes,paymentpatterns,andreportingconsiderations,aswellascreditsalesandnon-cashcosts,arereasonswhy operatingcashflowscandifferfromaccountingprofits. a.True b.False True ANSWER: Easy DIFFICULTY: Operatingcashflows TOPICS: 8.Ratioanalysisinvolvesa comparisonof therelationshipsbetweenfinancialstatementaccountsso as toanalyzethe financialpositionand strengthofafirm. a.True b.False True ANSWER: Easy DIFFICULTY: Ratioanalysis TOPICS:
5.Whenafirmpaysoffaloanusingcash,thesourceoffundsisthedecreaseintheassetaccount,cash,whiletheuse offundsinvolvesa decreaseina liabilityaccount,debt. a.True ANSWER: True DIFFICULTY: Easy TOPICS: Sourcesanduses 6.Non-cashassetsareexpectedtoproducecashovertimebuttheamountofcashtheyeventuallyproducecouldbe higherorlowerthanthevaluesatwhichtheassetsarecarriedonthebooks. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Non-cashassets 7.Taxes,paymentpatterns,andreportingconsiderations,aswellascreditsalesandnon-cashcosts,arereasonswhy operatingcashflowscandifferfromaccountingprofits. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Operatingcashflows 8.Ratioanalysisinvolvesa comparisonof therelationshipsbetweenfinancialstatementaccountsso as toanalyzethe financialpositionand strengthofafirm. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Ratioanalysis
Test-Bank-CFIN-4-4th-Edition-Besley.docx