When Preparing a Statement of Cash Flows,cash Equivalents Are Subtracted

question 123

True/False

When preparing a statement of cash flows,cash equivalents are subtracted from cash in order to calculate the net change in cash during a period.

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Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, to ensure they are equal.

Current Assets

Current assets are assets that a company expects to convert into cash, sell, or consume through the normal operations of the business within one year or one business cycle, whichever is longer.

Balance Sheet

A Balance Sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Assets

Resources owned by a company that have economic value and can provide future benefits.