The purposes of the statement of cash flows are to a. evaluate management decisions. b. determine ability to pay debts and dividends. c. predict future cash flows. d. All of the above

Question

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Answer 1

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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respond to ceasar Companies make adjusting entries to ensure that their financial statements accurately reflect the true financial position and performance during a specific accounting period. These entries are necessary to account for revenues earned and expenses incurred that may not yet have been recorded in the books. Adjusting entries are typically made at the end of an accounting period, during the preparation of financial statements, as part of the accounting cycle. This step is crucial in aligning the company’s books with the accrual basis of accounting, where revenues and expenses are recognized when they are earned or incurred, rather than when cash is received or paid. By making these adjustments, companies can provide accurate and reliable financial information to stakeholders.

According to the accrual method of accounting, businesses make adjusting entries to ensure that their financial statements are correctly depicting their financial situation and performance. No matter when cash transactions take place, adjusting entries are required to record revenues when they are generated and expenses when they are incurred (Weygandt et al., 2022). In order to guarantee that financial statements present an accurate and impartial picture of their company's financial health, these entries help in bringing financial records into compliance with the revenue recognition and matching standards. In order to account for things like accumulated revenues, accrued expenses, depreciation, and prepaid expenses, adjusting entries are usually made at the conclusion of an accounting period prior to the preparation of financial statements (Kieso et al., 2020). By implementing these changes, businesses avoid making false representations in their financial reports, which enables…

Answer 2

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 3

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 4

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

Answer 8

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer 12

Answer to Problem 1QC

(d) All the above

Answer 13

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).