Which of the Following Statements Is True

question 115

Multiple Choice

Which of the following statements is true?

• A)The "net change in cash" reported on the statement of cash flows is also reported on the statement of retained earnings.
• B)Both the income statement and the statement of cash flows show the results of a company's operating activities.
• C)The statement of cash flows is for a period of time while the income statement is at a point in time.
• D)The statement of cash flows is at a point of time while the income statement is for a period of time.

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Definitions:

Materiality Principle

An accounting principle that states financial reports should include all items significant enough to influence the decision-making process of an individual reading the report.

Charging to Expense

The process of recognizing a cost as an expense in the income statement during the period in which it is incurred.

Historical Cost Principle

An accounting principle requiring all financial items to be recorded based upon original cost, without adjusting for inflation or market value.

Primary Quality

Fundamental or inherent characteristics that determine the value or usefulness of something.