The Primary Purpose of the Statement of Cash Flows Is

question 79

Multiple Choice

The primary purpose of the statement of cash flows is to provide information

• A) about the revenue and expenses of an entity's operations during a period.
• B) that predicts future cash flows.
• C) about the operating, investing, and financing activities of an entity during a period.
• D) about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing.

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Definitions:

Long-Term Growth

Refers to the sustained increase in the productive capacity of an economy over a significant period of time, typically years or decades.

Recessionary Period

A time characterized by economic decline across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Inflation

A general increase in prices and fall in the purchasing value of money.

Inventories

Producers’ stocks of finished and in-process goods.