Multiple Choice Are revenues. Increase income. Are liabilities. Are not allowed under GAAP. Require an outlay of cash in the future.
Q: Long-term investments include cash that will be used to support current operations. True or False…
A: A long-term investment is an asset presented on the asset side of the balance sheet which represents…
Q: An SME does not need to present a statement of cash flows. True or false
A: statement of cash flows shows the cash inflows and cash outflows to and from the organization. It's…
Q: If the total asset is smaller than total liabilities and equity on the balance sheet, what does that…
A: If total asset is smaller than total liabilities and equity then it means there is surplus of…
Q: Identify which from the following scenarios depict relevant cash flows in making the decision…
A: While making decision for accepting two alternatives, we always consider relevant cost and relevant…
Q: An increase in the discount rate will____ a. Reduce the present value of future cash flows b.…
A: Present Value of Cash Flows = Cash Flow(1+i)n
Q: A non cash expense is an expense that does not require an outflow of cash. True or false?
A: Step 1 A liquid asset which includes currency, coins, checking accounts and undeposited checks…
Q: What are the two drawbacks associated with the payback period a. The time value of money is…
A: Payback period is one of the capital budgeting techniques which represent the time or years cash…
Q: Under the principle of cashflow estimation, why it is important that cashflow should be measured on…
A: A cash flow statement determines the net cash inflows and outflows from an organization during a…
Q: a) Determine the present value of the company's liability. b) Without doing any calculations,…
A: Determine the present value of the company’s liability. LNP Present Value of Liability = Debt…
Q: A disadvantage of using the payback period to compare investmentalternatives is that it;
A: Payback period: The payback period is the time period required to recover the initial investment of…
Q: /hich of the following statements is false? O a. Assets must always equal the sum of liabilities and…
A: Assets can be classified as current assets or long term assets and represented in the balance sheet.
Q: 10
A: Cash flow refers to the total amount of cash and its equivalents that travel in and out of a company…
Q: True/false Under IFRS, the discount rate should reflect risks for which future cash flow…
A: False Refer step 2 for explanation
Q: The net present value: is equal to the initial investment when the internal rate of return is equal…
A: The net present value is determined by, The Net present value (NPV) is defined as the difference…
Q: Quick assets include cash, temporary investments, inventory, and receivables. True or false?
A: Quick assets: Quick assets refer to those assets that can be immediately and easily converted into…
Q: If it is a deficit why should add AFN amount to cash and cash equivalents, not to debt? can you…
A: Deficit means the shortage. The asset equation is "Total assets = Total liabilities + Total equity".
Q: Which of the following statements are true regarding the payback period of an investment? It does…
A: Answer: The correct option is (4) All of the above.
Q: Which of the following statements is incorrect? Cash fund that is being held specifically for the…
A: Lets understand the basics. Cash or cash equivalent is an item which are either cash or either…
Q: echnical problems associated with the internal rate of return include:
A: IRR (Internal Rate of Return): It is the rate of return that makes the net present value of the…
Q: An increase in the discount rate will______ O a. Reduce the present value of future cash…
A: This question can be solved with the help of 2 examples. Example 1 Initial investment=15000 Discount…
Q: Which of the following is NOT a reason why cash flow may not equal net income? a. Capital…
A: The relationship of cash flow with net income is Cash flow =net…
Q: In the net present method future, cash flows are discounted to their present value a)TRUE b) FALSE
A: Under net present value method all future cash flows are discounted to their present value .
Q: limitation of discounted cash flow method.
A: Discounted cash flows - - Discounted cash flows method is used to estimate the value of an…
Q: deficit
A: If the total asset is smaller than total liabilities and equity on the balance sheet it means a…
Q: Determining the future value of one or more present day cash flows is known as ________. A.…
A: Future value is known as value in the future of present cash flows
Q: What is the operating cash flow or OCF? Explain why interest paid is not a component of operating…
A: Note: Since you have asked multiple questions, we will solve the first question for you. If you…
Q: only interested in measuring cash flows when they actually occur, not when they accrue as an…
A: the company makes an investment in the project an individual make investment in various types of…
Q: Note payments reduce cash and are related to long-term debt. Do these facts automatically lead to…
A: The interest payments on note payments usually reduce the cash balance of the company as they are…
Q: Since EBIT is not necessarily indicative of cash flow, many financial analysts adjust the…
A: The time's interest earned ratio: It is a financial ratio that helps in analyzing the capability of…
Q: describe how non-cash investing and fi nancing activities are reported
A: Cash Flow Analysis is done keeping cash in mind. It is in the form of a statement that depicts the…
Q: All of the following are weaknesses of the payback period EXCEPT Select one: a. only an implicit…
A: Payback period is period required to recover initial investment in the project.
Q: Achieving profitability will automatically assure sufficient amounts of cash. True or false?
A: Profitability is the ability of the company to earn a profit. Profit is an amount of revenue over…
Q: In the discounted cashflow method, the discount rate is used for the following reasons EXCEPT a. it…
A: Discounted Cashflow Method: The discounted cash flow (DCF) approach is a method of valuation that is…
Q: True (t) or False (f) ______ Short-term, highly liquid investments may be included with cash on the…
A: Cash and cash equivalents include Cash Commercial paper Treasury bills Short-term, highly liquid…
Q: Explain the problems posed for the use of the IRR when it is necessary (i) to choose between two…
A: IRR or Internal rate of return is the annualized rate of return for an project with expected cash…
Q: Which statement characterizes the time value of money concept? A) The future value of a present…
A: Present value means worth of a dollar today Future value worth of a dollar in future.
Q: hy is not a bad thing to have negative cash from financing activities?
A: The cash flow statement depicts how the company's financial situation has evolved over time. Cash is…
Q: To find the present value of an uneven series of cash flows, you must find the PVs of the individual…
A: The present value refers to that value which is the current value and by which the future value of…
Q: period
A: Payback period is defined as the time taken to recover the cost of an investment. In other words it…
Q: Which of the following is NOT a way O Discounted Cash Flow -DCF Relative Valuation -…
A: There are many types of valuation techniques used for valuation of company and equity.
Q: Which of the following is NOT an acceptable basis on which to measure an expense? A cash outflow. O…
A: Measurement of expenses defines a projection of expenses to be incurred in a time frame or for an…
Q: Lowering the discount rate on a cash flow will its present value.
A: Discount Rate: It is the rate at which the cash flows over the period are discounted.
Q: Why is the indirect method of cash flow confusing and why is it helpful?
A: Cash Flow Statement - Under Cash Flow there are three type activities involved - 1. Operating…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- The cash received in advance before delivering a product or performing a service is called unearned revenue.Which of the following returns is consistent with contractual cash flows that are SPPI? Return for passage of time. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Return for amounts to cover expenses and a profit margin. Group of answer choices I, II and III only I and IV only I, II, III and IV II and III only. Aliability created for receiving cash for future services to be provided is termed a(n) O service revenue. Oestimated warranty payable. Ounearned revenue. O accrued liability.
- Which of the following statements is false? Multiple Choice Prepaid insurance is a liability reported on the balance sheet. Prepaid insurance represents a future economic benefit. Prepaid insurance indicates that a company has already paid cash for insurance coverage that protects the company for some future time period. Prepaid insurance is a deferred expense.Match each definition with its correct term: Amounts owed by customers on account. [ Choose ] The analysis of customer balances by the length of time they have been unpaid. [ Choose ] A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. [ Choose ] An expense account to record uncollectible [ Choose ] receivables. The net amount a company expects to [ Choose ] receive in cash. A method of accounting for bad debts that involves expensing accounts at the time they [ Choose ] are determined to be uncollectible. A note that is not paid in full at maturity. [ Choose ] The party in a promissory note who is making [ Choose ] the promise to pay. Written promise (as evidenced by a formal [ Choose ] instrument) for amounts to be received. Various forms of nontrade receivables, such [ Choose ] as interest receivable and income taxes refundable. The party to whom payment of a promissory [ Choose ] note is to be made. Management estimates…For the following transactions, show which Balance Sheet line items will be affected and if the effect will result in the line item increase or reduction. • Purchase a Treasury Bill for cash• Client withdraws savings• Receive a donation• A current loan becomes past due• Purchase motorcycle for staff with short-term credit
- QB) Choose the correct answer: 5. Temporary accounts would not include: Select one: a. Depreciation expense. b. Salaries payable. c. Cost of goods sold. d. Supplies expense. 6. Operating cash outflows would include: Select one: a. Purchases of inventory b. Purchase of equipment. c. Purchase of investments. d. Repayment of bank loan.1. Does income approach convert future amounts to current amounts? 2. Is balance of payment accounts a financial management tool?If cash is received from a customer in the current period, but the related performance obligation is not satisfied until a future period, the related expenses of generating the revenue should not be recognized until that future period. This guideline is an application of the: Select one: O a. None of the answers are correct O b. revenue recognition principle. O c. cost constraint. O d. matching principle. e. full disclosure principle.
- An increase in Accrued Liability is ___________. options: A decrease in PP&E. A use of cash. A source of cash. No change in cash.Which of the following returns is consistent with contractual cash flows that are solely payments of principal and interest or SPPI? I. Return of passage of time II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset IV. Return for amounts to cover expenses and a profit margin a. I, II, III, and IV b. I, II, and III c. I and IV only d. II and III onlyWhen converting accrual basis to cash basis of accounting, which of the following adjustments should not be made to accrual basis sales to arrive at the cash basis sales? a. Deduct beginning balance of advances from customers. b. Subtract ending accounts receivable c. Add ending accounts receivable d. Add beginning accounts receivable