#1
Which of the following is an example of a cash flow from financing activities?
Payment for purchasing inventory
Payment of dividends to shareholders
Payment for rent expenses
Payment for advertising costs
#2
What does the term 'Accounts Payable' represent in financial accounting?
Money owed to suppliers or vendors for goods or services
Money owed by customers for goods or services
The company's cash reserves
Investments made by the company
#3
What is the purpose of the cash flow statement?
To show the profitability of a company
To track changes in the company's stock price
To provide information about the company's cash inflows and outflows
To calculate the company's debt-to-equity ratio
#4
Which activity involves the purchase or sale of long-term assets such as property, plant, and equipment?
Operating activities
Investing activities
Financing activities
Revenue-generating activities
#5
What is the primary purpose of a cash flow forecast?
To track historical cash flows
To predict future cash inflows and outflows
To analyze the company's profitability
To calculate the company's debt-to-equity ratio
#6
Which financial statement reports a company's cash inflows and outflows over a specific period?
Income statement
Balance sheet
Statement of cash flows
Statement of retained earnings
#7
What is the formula to calculate free cash flow (FCF)?
Operating cash flow + Investing cash flow
Net income - Dividends
Net income + Depreciation - Capital Expenditures - Changes in Working Capital
Cash flow from operating activities - Cash flow from investing activities
#8
What does a positive free cash flow indicate about a company?
The company is profitable but may be facing liquidity issues
The company has more cash coming in than going out
The company is experiencing a decline in sales
The company is not generating enough revenue
#9
Which financial ratio measures a company's ability to pay off its short-term liabilities with its most liquid assets?
Current ratio
Debt-to-equity ratio
Return on investment (ROI)
Earnings per share (EPS)
#10
What is the formula to calculate operating cash flow?
Net income + Depreciation
Net income + Interest expense
Net income - Changes in working capital
Net income + Changes in working capital
#11
Which of the following is considered a non-cash expense?
Salary payments to employees
Depreciation of equipment
Interest payments on loans
Dividend payments to shareholders
#12
What is the effect of an increase in accounts payable on the cash flow statement?
It decreases cash flow from operating activities
It increases cash flow from investing activities
It increases cash flow from financing activities
It has no effect on the cash flow statement
#13
How does a decrease in accounts receivable affect cash flow?
It decreases cash flow from operating activities
It increases cash flow from investing activities
It decreases cash flow from financing activities
It has no effect on cash flow
#14
What is the effect of issuing new equity on the cash flow statement?
It decreases cash flow from operating activities
It increases cash flow from investing activities
It increases cash flow from financing activities
It has no effect on cash flow
#15
What is the effect of repurchasing company shares on the cash flow statement?
It decreases cash flow from operating activities
It decreases cash flow from investing activities
It increases cash flow from financing activities
It has no effect on cash flow