A Basic Objective of the Statement of Cash Flows Is

question 26

Multiple Choice

A basic objective of the statement of cash flows is to

• A) Supplant the income statement and balance sheet
• B) Disclose changes during the period in all asset and all liability accounts
• C) Disclose the change in working capital during the period
• D) Provide essential information for financial statements users in making economic decisions

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Definitions:

Transfer of Shares

The process of moving ownership of shares from one party to another, either through sale, gift, or inheritance, commonly documented by a stock transfer form.

De Facto Corporation

A business entity that operates like a corporation but without legal incorporation status, often recognized by courts for liability purposes.

Defective Incorporation

A legal term referring to the situation where a company has been incorrectly or incompletely formed, potentially affecting its legal status and liabilities.

Personal Liability

The legal responsibility of an individual to settle debts or damages out of their own assets.