If a Company Has Gaps Between the Change in Cash

question 36

Multiple Choice

If a company has gaps between the change in cash and the net income for the year,

• A)the income statement provides sufficient explanation for the sources of these changes.
• B)the financial statement notes provide explanation for the sources of these changes.
• C)the statement of cash flow provides explanation of the sources of these changes.
• D)the statement of cash flow and balance sheet provide explanation for these changes.

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Definitions:

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business over a specific period, typically including balance sheets, income statements, and cash flow statements.

Puma Company

A global athletic and footwear brand known for its sports and lifestyle products.

Return on Total Assets

A financial ratio indicating the profitability of a company relative to its total assets, showing how efficiently assets are used to generate profit.

Ending Balance

The amount of money remaining in an account at the end of an accounting period, after all transactions have been accounted for.