In Preparing the Statement of Cash Flows, the Correct Order

question 19

True/False

In preparing the statement of cash flows, the correct order of reporting cash activities is Financing, Operating, Investing.

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Definitions:

Customer Refund Payable

A liability account representing the obligation of a business to return money to a customer due to overcharging or returning merchandise.

Accounting Equation

A fundamental financial principle representing the relationship between an entity’s assets, liabilities, and equity; expressed as Assets = Liabilities + Equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' share of the company.

Statement

A written record detailing the financial performance or position of a company at a specific point in time.