The statement of cash flows shows:Group of answer choicescash receipts and cash payments.the net worth of the entity.what the entity owns and owes.profitability.
Question
The statement of cash flows shows:Group of answer choicescash receipts and cash payments.the net worth of the entity.what the entity owns and owes.profitability.
Solution
The statement of cash flows shows: cash receipts and cash payments.
Here's a step-by-step explanation:
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The statement of cash flows is one of the main financial statements of a business (the others being the balance sheet, income statement, and statement of retained earnings).
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It provides information about a company's gross receipts and gross payments for a specific period. These receipts and payments are further divided into three main categories: operating activities, investing activities, and financing activities.
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Operating activities include transactions that occur in the day-to-day operations of the business, such as cash received from customers and cash paid to suppliers and employees.
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Investing activities include transactions involving the purchase and sale of long-term assets, such as property, plant, and equipment, and also investments in other businesses.
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Financing activities include transactions with owners and creditors, such as issuing stock, paying dividends, borrowing money, and repaying loans.
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The statement of cash flows does not show the net worth of the entity (that's the balance sheet), what the entity owns and owes (also the balance sheet), or profitability (that's the income statement). It focuses solely on the inflow and outflow of cash within a company.
Similar Questions
The Statement of cash flows helps management, investors, creditors and other interested parties evaluate the following about the entity (choose all that apply):Group of answer choicesCash investing and financing transactions for the periodExplains the difference between profit and net cash provided (used) by operating activitiesAbility to pay share dividends and meet obligationsAbility to generate future cash flows
The statement of cash flows reports:Multiple ChoiceEquity, net income, and dividends.Assets, liabilities, and equity.Cash receipts (inflows) and cash payments (outflows) for an accounting period.Changes in equity.Revenues, gains, expenses, and losses.
The statement of cash flows, provides users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilize those cash flowsGroup of answer choicesTrueFalse
The statement of cash flows is a financial statement that shows ______.
A statement of cash flows is needed because:Group of answer choicesaccrual-based financial statements are historic.it enables users to understand more clearly the entity's sources and uses of cash.accrual-based financial statements are not accurate.none of the options are true.
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