The Information in a Statement of Cash Flows Enables Stakeholders

question 36

Multiple Choice

The information in a statement of cash flows enables stakeholders to assess the

• A) amounts, timing and certainty of future cash flows.
• B) liquidity and solvency of an entity.
• C) change in working capital during the period.
• D) reason(s) for the difference between net income and cash flows from financing activities.

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Definitions:

FICA Medicare Taxes

These are taxes collected from both employers and employees in the United States to fund the Medicare program, which provides healthcare benefits for qualified individuals.

Federal Unemployment Taxes

Taxes imposed by the federal government on employers to fund state workforce agencies and unemployment insurance for workers who have lost their jobs.

State Unemployment Taxes

Taxes paid by employers to provide funding for unemployment compensation benefits for workers who have lost their jobs.

FICA Social Security Taxes

Taxes collected under the Federal Insurance Contributions Act (FICA) to fund the Social Security program, which provides benefits for retirees, the disabled, and children of deceased workers.