One of the Benefits of the Statement of Cash Flows

question 111

Multiple Choice

One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility. Which of the following explanations is a description of financial flexibility?

• A) The nearness to cash of assets and liabilities.
• B) The firm's ability to respond and adapt to financial adversity and unexpected needs and opportunities.
• C) The firm's ability to pay its debts as they mature.
• D) The firm's ability to invest in a number of projects with different objectives and costs.

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Definitions:

Sphenoid

Wedge-shaped.

Appendicular Skeleton

The portion of the skeleton that includes the bones of the limbs and the supporting bone girdles (pectoral and pelvic) that connect them to the central body, or axial, skeleton.

Limbs

Extremities of the body used for movement and interaction with the environment, such as arms and legs in humans.

Girdles

Structures that connect the limbs to the axial skeleton, including the pelvic girdle and shoulder girdle.