Which of the Following Represents Effects of an Asset Use

question 171

Multiple Choice

Which of the following represents effects of an asset use transaction on a company's financial statements? $$\begin{array} { | l | l | l | l | l | l | l | } \hline \text { Assets } = & \text { Liab. } + & \text { Equity } & \text { Rev. } - & \text { Exp. } = & \text { Net Inc. } & \text { Cash Flow } \\\hline\end{array}$$

• A)
• \[\begin{array} { | l | l | l | l | l | l | l | l | l | l | l }
• \hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-FA } \\
• \hline
• \end{array}\]
• B)
• \(\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
• \hline- & = & - & + & \text { NA } & \text { NA } & - & - & = & - & - \text { IA } \\
• \hline
• \end{array}\)
• C)
• \(\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
• \hline- & = &NA & + &-&-& - &NA & = & - & - \text { OA } \\
• \hline
• \end{array}\)
• D)
• \[\text { None of these could represent the effects of an asset source transaction. }\]

Distinguish between cash flows from operating activities and other adjustments.

Recognize the effect of accounts receivable, inventory, and accounts payable changes on cash flow.

Calculate net cash flow given a set of transactions.

Understand the final steps in preparing a statement of cash flows, including adjustments and listing non-cash activities.

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Definitions:

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