Which of the Following Statements Is Not Correct

question 24

Multiple Choice

Which of the following statements is not correct?

• A) The statement of cash flows effectively duplicates the function of the cash budget.
• B) Analysis of an entity's cash flow position requires an examination of trends in statement of cash flows items over several years.
• C) The statement of cash flows can explain the effects of operating activities on the entity's cash position.
• D) The statement of cash flows can provide information about the causes of changes in the entity's cash position over the period.

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Definitions:

Profit

The financial gain made in a transaction or business operation, calculated as the excess of revenue over expenses.

Unit Variable Costs

The costs associated with producing one unit of a product or service, which vary directly with the volume of production.

Fixed Costs

Fixed charges that are unaffected by the volume of output or the quantity sold, including rental fees and payrolls.

Production Data

Information related to the amount, type, and quality of goods or services produced.