5th Edition

ISBN: 9780078025914

Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby

Publisher: McGraw-Hill Education

Concept explainers

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

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Textbook Question

Chapter 12, Problem 9MC

The total change in cash as shown near the bottom of the statement of cash flows for the year should agree with which of the following?

a. The difference in Retained Earnings when reviewing the comparative balance sheet.
b. Net income or net loss as found on the income statement.
c. The difference in cash when reviewing the comparative balance sheet.
d. None of the above.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 12, Problem 8MC

Chapter 12, Problem 10MC

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The total change in cash as shown near the bottom of thestatement of cash flows for the year should agree withwhich of the following?a. The difference in Retained Earnings when reviewingthe comparative balance sheet.b. Net income or net loss as found on the income statement.c. The difference in cash when reviewing the comparativebalance sheet.d. None of the above.

Which one of the following items is not generally used in preparing a statement of cash flows? Select one: a Adjusted trial balance b. Comparative statements of financial position c. Current income statement O d Additional information

The change in cash for the year can be calculated by comparing the balance of cash reported in this year’s and last year’s balance sheet. Why is the statement of cash flows needed?

Chapter 12 Solutions

Fundamentals of Financial Accounting

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Solution Summary: The author explains that the correct answer is Option (c) The difference in cash when reviewing the comparative balance sheet.

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Chapter 12 Solutions