Which of the Following Statements Is Not True Relating to Cash

question 44

Multiple Choice

Which of the following statements is not true relating to cash flow analysis?

• A)Cash return on assets indicates the amount of operating cash flow generated for each dollar invested in assets.
• B)To maximize cash flow from operations,a company strives to increase both cash flow per dollar of sales and sales per dollar of assets invested.
• C)Cash return on assets can be separated to examine two important business strategies: cash flow to sales and asset turnover.
• D)Positive cash flow from operations is not important to a company's survival in the long-run.

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Definitions:

Revaluation Model

An accounting method that allows for the upward adjustment in the carrying amount of a fixed asset to reflect its current market value.

Exchange Rate

The price at which one currency can be exchanged for another currency in the foreign exchange market.

Balance Sheet

A financial statement that summarizes an organization's assets, liabilities, and shareholders' equity at a specific point in time.