Test Bank for Analysis For Financial Management 13th Edition Robert
Higgins, Jennifer Koski, Todd Mitton
Student name:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Current liabilities are defined as liabilities with a maturity of less than one year.
⊚ true
⊚ false
2) A decline in the Net Property, Plant, and Equipment account between year-end 2020 and
year-end 2021 is a clear indication that fixed assets were sold during 2021.
⊚ true
⊚ false
3) When reporting financial performance for tax purposes, U.S. companies prefer to use
accelerated depreciation methods over the straight-line method.
⊚ true
⊚ false
4) Accounting rules require U.S. companies to depreciate research and development (R&D)
expenditures using the straight-line method.
⊚ true
⊚ false
5) You can construct a sources and uses statement for 2021 if you have a company’s yearend balance sheets for 2021 and 2022.
⊚ true
⊚ false
6) A reduction in long-term debt is a use of cash.
⊚ true
⊚ false
7) The accrual principle requires that revenue not be recognized until payment from a sale is
received.
⊚ true
⊚ false
8) An increase in cash and cash equivalents should appear as a use of cash on the sources
and uses statement.
⊚ true
⊚ false
9) A cash flow statement places each source or use of cash into one of three broad
categories: operating activities, investing activities, or financing activities.
⊚ true
⊚ false