The Statement of Cash Flows

question 48

Multiple Choice

The statement of cash flows

• A) must be prepared on a daily basis.
• B) summarizes the operating financing and investing activities of an entity.
• C) is another name for the income statement.
• D) is a special section of the income statement.

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Definitions:

Tax Purposes

The reasons or motivations behind decisions or actions taken to comply with tax laws and regulations.

Valuation Allowance

A reserve created to account for future tax benefits that may not be realized, reducing the reported value of deferred tax assets to an amount that is more likely to be realized.

Deferred Tax Asset

This asset reflects the future tax benefits that a company is entitled to, due to deductible temporary differences and carryforwards.

Operating Loss

A loss that occurs when a company's operating expenses exceed its revenues.