One of the Benefits of the Statement of Cash Flows

question 111

Multiple Choice

One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility. Which of the following explanations is a description of financial flexibility?

• A) The nearness to cash of assets and liabilities.
• B) The firm's ability to respond and adapt to financial adversity and unexpected needs and opportunities.
• C) The firm's ability to pay its debts as they mature.
• D) The firm's ability to invest in a number of projects with different objectives and costs.

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Definitions:

Role Clarity

The extent to which one's job responsibilities, expectations, and boundaries are clearly understood.

Role Acceptance

The process by which individuals agree to, and start performing, the behaviors expected of them in a particular role within a group or organization.

Role Performance

The enactment of behaviors or actions associated with a particular role in society or a specific context.

Performance Goals

Objectives set to assess the effectiveness or outcome of an action or series of actions, often used to evaluate success or progress in various contexts.