All of the Following Are Limitations of the Statement of Cash

question 18

Multiple Choice

All of the following are limitations of the statement of cash flows, except:

• A) financial ratios based on cash flow data are better at predicting financial distress for companies than other ratios that rely solely on accrual accounting balances.
• B) it provides past cash flow data, which may not be a good predictor of future cash flows.
• C) the direct method of determining cash flows from operating activities is more costly to apply than the indirect method.
• D) non-cash transactions and events while relevant to the financial affairs of the entity are excluded from the statement of cash flows.

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Definitions:

Unique Selling Proposition

A branding principle that enables a brand to distinguish itself from its direct competitors (regardless of whether any unique quality actually exists).

Discourse

Written or spoken communication or debate, often referring to the exchange of ideas and information on a particular topic or issue.

Immune

Refers to the state or condition of having a natural or acquired resistance to specific pathogens or diseases.

Brand Extension

The process of leveraging the meanings and emotions associated with a particular company to a variety of different products that don’t necessarily have any relationship to one another.