How Is the Statement of Cash Flows Connected to the Balance

question 23

Multiple Choice

How is the statement of cash flows connected to the balance sheet?

• A)The statement of cash flows shows changes in the asset and liability accounts to explain cash from operating activities.
• B)The changes in all revenue and expense accounts are calculated and then listed as cash inflows or outflows.
• C)The changes in all of the balance sheet accounts are calculated and then listed as inflows or outflows, except for cash.
• D)Changes in asset accounts are recorded as operating activities, changes in liability accounts are recorded as financing activities and changes in equity accounts are recorded as investing activities.

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Definitions:

Stereotyping

The act of categorizing individuals or groups into oversimplified and generalized roles or attributes based on perceived characteristics.

Preconceptions

Pre-existing beliefs or opinions formed before having evidence or experience.

Assumptions

Beliefs or statements taken for granted without proof, often used as a basis for reasoning or argument.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often resulting in prejudice against other cultures.