In the context of financial accounting, what is the primary purpose of the statement of cash flows? A) To provide information about a company's economic resources and claims against those resources. B) To report the financial position of a company at a specific point in time. C) To disclose changes in equity during a specific period. D) To present the cash inflows and outflows of a company's operating, investing, and financing activities during a specific period.

In the context of financial accounting, what is the primary purpose of the statement of cash flows? A) To provide information about a company's economic resources and claims against those resources. B) To report the financial position of a company at a specific point in time. C) To disclose changes in equity during a specific period. D) To present the cash inflows and outflows of a company's operating, investing, and financing activities during a specific period.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The statement of cash flow consists of three main activities, as follows: Operating Investing…

A: It is the statement which shows the inflow and outflow of cash in the organisation by means of…

Q: What accounts on the balance sheet must be evaluated when completing the investing activities…

Q: When preparing the statement of cash flows, companies are required to report separately as operating…

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and…

Q: statement of cash flow provides information about -a company's future cash flows -decisions made by…

A: Cash flows provide cash money available with company over given period of time. is derived from…

Q: Cash flows from operating activities with the indirect method include: A. changes in accounts…

A: Introduction:- A cash flow statement denotes total amount cash is inflows and cash outflows your…

Q: eceipts and payments must be classified in the statement of cash flows as to whether they are from…

Q: 1. What is the definition of a total cash received during the year? How it is important to the to…

A: Approach to Solving the Question:Define Each Concept: Let commence with the description of what each…

Q: What information can a statement of cash flows provide about a company’s financingactivities that…

A: Cash flow statement: A type of financial statement which shows the cash position of a business by…

Q: What is a primary objective of financial reporting? A. To provide useful information to investors,…

A: Financial reports are the statements prepared by the entity to show the correct financial position…

Q: How do ledger and journal entries interact with one another?

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: The ________ is a measure of a company's ability to pay its current liabilities from cash and cash…

A: Cash conversion cycle is a working capital metric which expresses how many days it takes a company…

Q: A company’s financial statements consist of the balance sheet, income statement, and statement of…

A: Financial Statement: These statements represent the collection of the organization's summarily…

Q: How can you tell by looking at the Statement of Cash Flows of a company that the company collected…

A: In a cash flow statement, cash flows from operating activities are those activities which are done…

Q: You can determine a company’s cash situation by analyzing the cash flow statement. The cash flow…

A: 1. Which of the following is true for the statement of cash flows? Option a. It reflects cash…

Q: What information can a statement of cash flows provide about a company’s investing activities that…

A: Cash flow statement: A type of financial statement which shows the cash position of a business by…

Q: Which of the following is a specific objective of financial reporting? a. provide information…

A: Financial Reporting - Financial reporting includes reporting on the income statement, Statement of…

Q: Which of the following is reported as an investing activity in the statement of cash flows? The…

A: Cash flows from investing activity involves cash payment on purchasing of assets & investment…

Q: In the context of financial accounting, what is the primary purpose of the statement of cash flows?…

A: A) To provide information about a company's economic resources and claims against those…

Q: Which of the following statements describes the statement of cash flows? Group of answer choices…

A: Statement of Cash Flow - This statement includes movement of cash during financial year. Such…

Question

In the context of financial accounting, what is the primary purpose of the statement of cash flows?
A) To provide information about a company's economic resources and claims against those resources.
B) To report the financial position of a company at a specific point in time.
C) To disclose changes in equity during a specific period.
D) To present the cash inflows and outflows of a company's operating, investing, and financing activities during a specific
period.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of Cash Flow Statement

VIEW

Step 2: Objectives of cash flow statement

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

One output of the accounting information system is the balance sheet. Transactions commonly associated with an organization's purchases and cash disbursements cycle are most likely to be reflected in which sections of balance sheet? A Current assets and current liabilities B Current assets and long-term liabilities C Long-term assets and current liabilities D Long-term assets and long-term liabilities
What is the role of the statement of cash flows in the financial statements' usage by the public?
Which of the following is not a use of the statement of cash flows? a.Helps creditors analyze the company's operations. b.Provides information about the sources of cash flows. c.Measures how efficiently the company's cash resources are being used. d.Provides insights into the quality and reliability of reported income.
Activity reported in the Financing Activities section of the statement of cash flows would include accounts classified as a.current assets and current liabilities. b.long-term assets and long-term liabilities. c.long-term liabilities and stockholders' equity. d.current liabilities and stockholders' equity.
On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would include a. receipts from the sale of investments b. receipts from the issuance of capital stock c. gains or losses on fixed assets d. payments for cash dividends