When Preparing a Statement of Cash Flows Using a Spreadsheet

question 2

Multiple Choice

When preparing a statement of cash flows using a spreadsheet, it is best to begin the spreadsheet with

• A) a trial balance.
• B) an adjusted trial balance.
• C) a balance sheet.
• D) a balance sheet and an income statement.

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Definitions:

External Auditors

Professionals who independently assess the financial statements of an organization to ensure their accuracy and compliance with applicable standards.

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns, often through the purchase of securities, real estate, or other investment vehicles.

Factory Overhead Costs

Indirect expenses related to the manufacturing process that cannot be traced directly to specific units produced, such as utilities and rent for the production facility.

Direct Materials Cost

The cost of raw materials and components used directly in the production of goods or provision of services, directly traceable to the finished product.