The Primary Purpose of the Statement of Cash Flows Is

question 53

Multiple Choice

The primary purpose of the statement of cash flows is to provide information about

• A)the financial position of the company.
• B)the cash inflows and outflows of the company.
• C)the investing and financing activities of the company.
• D)the profitability of the company.

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Definitions:

Net Realizable Value

The estimated selling price in the regular course of business minus any costs of completion, disposal, and transportation.

Inventory

The goods and materials a business holds for the purpose of sale or production.

Remeasured

The process of adjusting the value of an asset or liability to reflect its current market value or to correct any errors in initial measurement.

Depreciation Expense

The portion of the total cost of a tangible asset that is charged as an expense to the income statement over its useful life, reflecting wear and tear.