Which Statement Concerning a Funds Statement Based on the Working

question 11

Multiple Choice

Which statement concerning a funds statement based on the working capital definition of funds is not correct?

• A) It includes transactions that have no effect on the components of working capital, e.g., the purchase of inventory
• B) It omits many transactions that could be important to users for decision making
• C) The difference between sources and uses of working capital will be equal to the change in working capital between two successive balance sheets
• D) None of the above, i.e., all of the statements are correct

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Definitions:

Widgets

A general term commonly used to describe any theoretical produced item or merchandise.

Economically Efficient

Refers to a situation where resources are allocated in a way that maximizes the net benefit to society.

Revenue

The income generated from normal business operations and includes discounts and deductions for returned merchandise.