Financial Statements Are Prepared After an Entity's Transactions Are Analyzed

question 146

Multiple Choice

Financial statements are prepared after an entity's transactions are analyzed and recorded.Which of the following reports is one of the required financial statements?

• A)Statement of cash flows
• B)Statement of return on assets
• C)Statement of dividends
• D)Expense statement

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Cash Flow Data

Information regarding the inflows and outflows of cash for a business or project, crucial for assessing liquidity and operational efficiency.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.