The Statement of Cash Flows Will Not Provide Insight into

question 134

Multiple Choice

The statement of cash flows will not provide insight into

• A) why dividends were not increased.
• B) whether cash flow is greater than net income.
• C) the exact proceeds of a future bond issue.
• D) how the retirement of debt was accomplished.

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Definitions:

Accrual

The accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Onerous Contracts

Contracts in which the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received under it.

Accruals

Accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur, reflecting the economic activity more accurately.

Employee Benefits

All forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.