Chapter 26, Problem 3CQ

a.

Summary Introduction

To identify: The given statement is source or use of cash, and also explains the effect on firms cash balance.

Source of cash:

The company needs funds to fulfill the present as well as the future financial needs of the company. The company needs cash to satisfy these financial needs. All the options available to company for procurement of funds are considered as the sources of cash.

Uses of cash:

All the payments made by a company to outsiders are the use of cash. In business cycle one pay to another and this cycle continue till the business ends. The use of cash will reduce the cash balance of the company.

b.

Summary Introduction

To identify: The given statement is source or use of cash, and also explains the effect on firms cash balance.

Source of cash:

The company needs funds to fulfill the present as well as the future financial needs of the company. The company needs cash to satisfy these financial needs. All the options available to company for procurement of funds are considered as the sources of cash.

Uses of cash:

All the payments made by a company to outsiders are the use of cash. In business cycle one pay to another and this cycle continue till the business ends. The use of cash will reduce the cash balance of the company.

c.

Summary Introduction

To identify: The given statement is source or use of cash, and also explains the effect on firms cash balance.

Source of cash:

The company needs funds to fulfill the present as well as the future financial needs of the company. The company needs cash to satisfy these financial needs. All the options available to company for procurement of funds are considered as the sources of cash.

Uses of cash:

All the payments made by a company to outsiders are the use of cash. In business cycle one pay to another and this cycle continue till the business ends. The use of cash will reduce the cash balance of the company.

d.

Summary Introduction

To identify: The given statement is source or use of cash, and also explains the effect on firms cash balance.

Source of cash:

The company needs funds to fulfill the present as well as the future financial needs of the company. The company needs cash to satisfy these financial needs. All the options available to company for procurement of funds are considered as the sources of cash.

Uses of cash:

All the payments made by a company to outsiders are the use of cash. In business cycle one pay to another and this cycle continue till the business ends. The use of cash will reduce the cash balance of the company.

e.

Summary Introduction

To identify: The given statement is source or use of cash, and also explains the effect on firms cash balance.

Source of cash:

The company needs funds to fulfill the present as well as the future financial needs of the company. The company needs cash to satisfy these financial needs. All the options available to company for procurement of funds are considered as the sources of cash.

Uses of cash:

All the payments made by a company to outsiders are the use of cash. In business cycle one pay to another and this cycle continue till the business ends. The use of cash will reduce the cash balance of the company.