The Statement of Cash Flows May Be Viewed in Terms

question 3

Multiple Choice

The statement of cash flows may be viewed in terms of the balance sheet equation.Which of the following expressions below is correct?

• A)Change in Cash = Change in (Liabilities + Stockholders' Equity − Noncash Assets)
• B)Change in Cash = Change in (Stockholders' Equity − Liabilities + Noncash Assets)
• C)Change in Cash = Change in (Liabilities − Noncash Assets)
• D)Change in Cash = Change in (Stockholders' Equity − Liabilities)

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Definitions:

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term projects proportionally with the degree of completion.

Revenue Recognition

the accounting principle dictating the conditions under which revenue is considered earned and can be recorded in the financial statements.

Contract Price

The agreed-upon price for goods or services that is specified in a contractual agreement.

Critical Event

A significant occurrence that has a substantial impact on the operations or financial health of a business or market.