A Statement of Cash Flows Is Generated to Show

question 12

Multiple Choice

A statement of cash flows is generated to show

• A)the revenues the company has earned during the period.
• B)the expenses the company incurred during the period.
• C)how profits were generated during the period.
• D)the inflow and outflow of cash during the time period.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.

Ledger Accounts

Individual records that summarize transactions related to a specific account within the general ledger.

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company's balance sheet.

Credits

Accounting entries that increase liabilities or equity, or decrease assets.