All of the Following Are Reasons That the Statement of Cash

question 43

Multiple Choice

All of the following are reasons that the statement of cash flows is useful to the analyst except:

• A)The statement of cash flows shows how cash is generated during an accounting period and how it has been used.
• B)A positive net income figure on the income statement is ultimately insignificant unless a company can translate its earnings into cash, and the only source in financial statements for learning about cash generation is the statement of cash flows.
• C)The statement of cash flows shows the adjustments made to net income in order to calculate cash flow from operations; those should be examined to determine why cash flow from operations is negative or positive.
• D)The statement of cash flows is the only financial statement that cannot be manipulated.

Understand the concept of disinflation and distinguish it from inflation and deflation.

Describe the relationship between disinflation, unemployment rate, and output as explained by the Phillips curve.

Calculate and interpret the sacrifice ratio in scenarios of disinflation.

Explain the impact of central bank policies on unemployment and inflation, including the role of expectations.

---

Definitions:

Services

Intangible products such as consultancy, maintenance, or repair that are bought and sold in the marketplace.

Telephone Bill

A monthly statement charging an individual or company for the use of telephone services.

Expense

An outflow of cash or other valuable assets that a business incurs as a result of its operations intended to generate revenue.

Liability

Financial obligations or debts that a company owes, which are settled over time through the transfer of economic benefits including money, goods, or services.