The Conceptual Model for the Statement of Cash Flows Is

question 53

Essay

The conceptual model for the statement of cash flows is based on which of the following equations?
A)Total Cash Flows = Cash from Operating Activities + Cash from Financing Activities + Cash from Investing Activities
B)Net Income = Revenues - Expenses + Gains - Losses
C)Assets = Liabilities + Equity
D)Change in Retained Earnings = Net Income - Dividends

• A)Total Cash Flows = Cash from Operating Activities + Cash from Financing Activities + Cash from Investing Activities
• B)Net Income = Revenues - Expenses + Gains - Losses
• C)Assets = Liabilities + Equity
• D)Change in Retained Earnings = Net Income - Dividends

---

Definitions:

Pretax Cost

This refers to an expense or cost incurred by a business before accounting for taxes.

WACC

The Weighted Average Cost of Capital represents a method for determining a company's capital cost, with each type of capital being weighted according to its proportion.

Cost of Retained Earnings

The opportunity cost to shareholders for having a company retain earnings instead of paying them out as dividends.

Flotation Costs

Expenses incurred by a company in issuing new securities, including legal, administrative, and underwriting fees.