What Tracks and Communicates Changes in the Shareholder's Earnings

question 30

Multiple Choice

What tracks and communicates changes in the shareholder's earnings?

• A) Balance sheet
• B) Statement of owner's equity
• C) Statement of cash flows
• D) Income statement

---

Definitions:

Indirect Method

The indirect method is a technique used in financial accounting to prepare the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital to find net cash from operating activities.

Cash Outflows

Money going out of a business for any expense, investment, or payment.

Financing Activities

Transactions involving raising capital and repaying it to owners, including issuing equity, settling loans, and paying dividends.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership interest in a corporation.