Which of the Following Statements About the Statement of Cash

question 191

Multiple Choice

Which of the following statements about the statement of cash flows is not correct?

• A)GAAP requires every company to report a statement of cash flows.
• B)The statement of cash flows is contained in the notes to the financial statements.
• C)The statement of cash flows is needed because the income statement and balance sheet do not provide adequate information about the changes in cash.
• D)The statement of cash flows provides information about how each major type of business activity causes a company's cash to change.

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Definitions:

Amortization Expense

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Useful Life

Useful life is the estimated duration of time that an asset is expected to be usable for the purpose it was acquired, often influencing depreciation calculations.

Accumulated Depletion

The total amount of natural resources cost that has been allocated as an expense due to the physical removal or consumption of the natural resource.

Contra-Asset Account

An account that is used to reduce the value of a related asset, e.g., allowance for doubtful accounts reduces accounts receivable.