A Statement of Cash Flows Reconciles the Net Income Earned

question 83

True/False

A statement of cash flows reconciles the net income earned during a given year, and any cash dividends paid, with the change in retained earnings between the start and end of that year.

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Definitions:

Restricted

Restricted typically refers to assets or securities that are not freely tradable or accessible due to regulations or specific conditions.

Cash Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings in cash.

Corporation Liability

Legal and financial obligations a corporation owes to others, which can involve debts, lawsuits, or other claims against the business.

Restricted Retained Earnings

Portion of retained earnings that is not available for distribution as dividends to shareholders, often because of legal or contractual constraints.