Which of the Following Statements Is CORRECT

question 18

Multiple Choice

Which of the following statements is CORRECT?

• A) The statement of cash flows shows how much the firm's cash⎯the total of currency, bank deposits, and short-term liquid securities (or cash equivalents)⎯increased or decreased during a given year.
• B) The statement of cash flows reflects cash flows from operations, but it does not reflect the effects of buying or selling fixed assets.
• C) The statement of cash flows shows where the firm's cash is located; indeed, it provides a listing of all banks and brokerage houses where cash is on deposit.
• D) The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in working capital.
• E) The statement of cash flows reflects cash flows from operations and from borrowings, but it does not reflect cash obtained by selling new common stock.

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Definitions:

Endorses

To endorse is to support, approve, or recommend something, or in the context of checks, to sign the back of a check to authorize its transfer or cashing.

Dishonor

Refers to the refusal by a bank to pay a check or draft presented for payment, usually due to insufficient funds.

Ratification

The approval or formal sanctioning of an agreement or act, often making it officially valid.

Unauthorized

Actions or access that have not been approved or given consent by the proper authority.