A Statement of Cash Flow's Purpose Is To

question 33

Multiple Choice

A statement of cash flow's purpose is to:

• A)show the revenue earned.
• B)show the profits that were generated.
• C)show the expenses that were incurred.
• D)show how cash was generated and used during an accounting period.

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Definitions:

Organization Expense

Organization expense refers to the costs associated with forming a business entity, such as legal fees, filing fees, and costs of issuing stock.

Paid in Capital in Excess

Financial capital received from investors above the par value of the shares issued, also known as additional paid-in capital.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match its market value.