Question 1-3

Question Completion Status: QUESTION 1 Which of the following statements is correct? O a Financial reporting involves examining company performance in the context of economic and Industry conditions to make a decision O b. Financial analysis involves providing information about a company's performance, financial position, and changes in financial position that is useful to users in making economic decisions OC Liquidity refers to a company's ability meet long-term obligations, and solvency refers to a company's ability to meet short-term obligations O d. None of the above statements is correct QUESTION 2 which of the following is NOT a specific economic decision that can be analyzed by evaluating financial reports? a. Evaluating a merger or acquisition candidate O b. Evaluating a stock for inclusion in an investor's Investment portfolio Oc. Forecasting future net income and cash flow. Od: Assigning a debt rating to a company or bond issue Oe. None of the above (that is, all of the above responses are examples of possible economic decisions) QUESTION 3 When preparing the Statement of Cash Flows by using the Indirect Method, all of the following statements are correct EXCEPT O a The Statement shows only the company's cash receipts and disbursements, Ob. The statement includes a line item for net income. O c The Statement is divided into three categories: operating activities, investing activities and financing activities. O d. Stock analysts use the Statement of Cash Flows to evaluate a company's liquidity and solvency. Oe. None of the above (.e., all of the above answers are correct)