The Statement of Cash Flows Cannot Be Used to Determine

question 178

Multiple Choice

The statement of cash flows cannot be used to determine:

• A)changes in working capital.
• B)expenditures on long-term assets.
• C)profitability as measured by specific revenues and expenses.
• D)reliance on external financing.

---

Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset.

Comparative Balance Sheet

A comparative balance sheet presents financial positions of a business at different periods side by side to help in analyzing trends over time.

Net Increase

The total amount by which a value or quantitative measure has grown compared to a previous measurement or period.

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional stock, from its earnings.