Which of the Following Statements About the Financial Statements Is

question 170

Multiple Choice

Which of the following statements about the financial statements is correct?

• A) The "change in cash" reported on the statement of cash flows is also reported on the statement of retained earnings.
• B) Both the income statement and the statement of cash flows show the result of a company's operating activities.
• C) The statement of cash flows is for a period of time while the income statement is at a point in time.
• D) The statement of cash flows is at a point of time while the income statement is for a period of time.

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Definitions:

Cash Conversion Cycle

The length of time between the firm’s actual cash expenditures on productive resources (materials and labour) and its own cash receipts from the sale of products (i.e., the length of time between paying for labour and materials and collecting on receivables). Thus, the cash conversion cycle equals the length of time the firm has funds tied up in current assets.

Accounts Payable

Accounts Payable is the amount of money owed by a company to its creditors for goods and services purchased on credit.

Financial Cost

Expenses associated with borrowing funds or purchasing on credit, including interest expenses, fees, and other charges.

Balance

This term refers to the total amount of money in a financial account, the difference between credits and debits in an account, or the equilibrium between opposing forces or actions.