The Statement of Cash Flows Is Designed to Fulfill All

question 22

Multiple Choice

The statement of cash flows is designed to fulfill all of the following purposes except:

• A) to determine the company's ability to pay dividends to shareholders
• B) to assess the collectibility of accounts receivable
• C) to predict future cash flows
• D) to show the relationship of net income to changes in the company's cash

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Definitions:

Job Order Cost System

An accounting method that accumulates costs for each individual job or project, tracking materials, labor, and overhead.

Uniform Products

Products that are identical in quality and performance, manufactured to meet a standard specification.

Cost Accounting

An area of accounting that involves measuring, recording, and reporting product costs.

Product Costs

Costs that are directly tied to the production of goods or services, including raw materials and labor.