Which Statement Concerning the Interpretation of a Statement of Cash

question 19

Multiple Choice

Which statement concerning the interpretation of a statement of cash flows is incorrect?

• A) The notes to the statement of cash flows are important in interpreting the firm's cash position.
• B) Ways in which cash flows can be manipulated include delaying cash payments and employing finance leases.
• C) It is the indirect method rather than the direct method of preparation that is preferred by the standard setters.
• D) The statement of cash flows as required under IAS 7/AASB 107 only goes some of the way in enabling users to establish the liquidity/solvency position of an entity.

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