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ACC 291 Week 4 Discussion Questions and Responses PaperScholar Study Aids
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ACC 291 Week 4 Discussion Questions and Responses

ACC 291 Week 4 Discussion Questions and Responses

Week 4:

DQ 1:   What are the differences between the direct and indirect presentation of cash flows?  What are the advantages and disadvantages of the direct and indirect methods and which does the Financial Accounting Standards Board (FASB) favor and why?

DQ 2:  Why, and to whom, is the statement of cash flow useful? What is the most important section of the statement of cash flows for investors? Why?

DQ3: What are some common ratios that are used to analyze financial information? Which two ratios do you think should be of greatest interest to: (a) A pension fund considering the purchase of 20-year bonds? (b) A bank contemplating a short-term loan? (c) A common stockholder?

What is a ratio?  What are the different ways of expressing the relationship of two amounts?  What information does a ratio provide?

DQ4: What are some of the things that may limit the usefulness of financial statement analysis? Identify a ratio and explain how one or more of the limiting factors can affect the usefulness of that ratio.