The Statement of Cash Flows Reports

question 157

Multiple Choice

The statement of cash flows reports:

• A)Assets,liabilities,and equity.
• B)Revenues,gains,expenses,and losses.
• C)Cash inflows and outflows for an accounting period.
• D)Equity,net income,and dividends.
• E)Changes in equity.

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Definitions:

Initial Capital Requirements

The amount of funds required to start a business, covering costs such as land, buildings, equipment, inventory, and working capital.

Assets

Any resource that a business owns and expects to use to its benefit.

Borrowed Funds

Funds obtained through loans or credit, not from direct earnings or investments.

Leverage

The ability to finance an investment through borrowed funds, increasing both the potential for return and the level of risk.