An Objective of the Statement of Cash Flows Is to

question 14

Multiple Choice

An objective of the statement of cash flows is to

• A) disclose changes during the period in all asset and all equity accounts.
• B) disclose the change in working capital during the period.
• C) provide information about the operating, investing, and financing activities of an entity during a period.
• D) None of these answers are correct.

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Definitions:

Going-concern Assumption

An accounting principle that assumes a business will continue to operate indefinitely, rather than being liquidated.

Financial Statements

Standardized documents that provide an overview of a company's financial performance and position, including the balance sheet, income statement, and cash flow statement.

Operating

Pertains to the regular, ongoing activities of a business that are involved in the production or sale of goods and services.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.