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(a)
Financial statement
Financial statements provide details about a company's annual earnings, cash available at the end of the year, assets and liabilities,
Balance Sheet - Income statement
- Statement of retained earnings
- Statement of
cash flows
To describe: The statement of cash flows.
(a)
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Explanation of Solution
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
(b)
To explain: Whether cash flow statement is an optional financial statement.
(b)
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Answer to Problem 1Q
Disagree, Cash flow statement is not an optional financial statement. Cash flow is one among the four basic financial statements of the company.
Explanation of Solution
As per Generally Accepted Accounting Principles (GAAP) it is mandatory that a company must prepare statement of cash flows, when preparing financial statement for a company. Hence, the cash flow statement is not an optional financial statement.
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Chapter 12 Solutions
Financial Accounting, 10e WileyPLUS Registration Card + Loose-leaf Print Companion
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