Why is the statement of cash flows necessary? Because investors and managers wanted information on how...
Why is the statement of cash flows necessary?
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Because investors and managers wanted information on how much cash went up or down in a period |
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Because investors and managers needed information on the net profit of a period |
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Because investors and managers wanted additional information on why cash went up or down in a period |
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Because the income statement is constructed using cash-basis accounting |
Homework Answers
| Correct answer is 3rd. | ||
| Bacause investors and managers wanted additional information on why cash went up or down in a period | ||
| Option 1st is incorrect because how much cash went up or down can be checked from balance sheet itself. | ||
| option 2nd is incorrect because net profit related information is available on income statement. | ||
| Option 4th is incorrect because income statement is contruted using accrual basis of accounting. | ||
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Why is the statement of cash flows necessary?
Because investors and managers wanted information on how...
31. Why is the statement of cash flows necessary? Because investors and managers wanted information on...
31. Why is the statement of cash flows necessary? Because investors and managers wanted information on how much cash went up or down in a period Because investors and managers needed information on the net profit of a period Because investors and managers wanted additional information on why cash went up or down in a period Because the income statement is constructed using cash-basis accounting
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1. Why was the statement of cash flows created by the Financial Accounting Standards Board (FASB)? 2. Describe the three classifications of cash flows, and provide examples of activities that would appear in each classification. 3. Which section of the statement of cash flows is widely regarded as the most important? Why? 4. Briefly describe the four steps required to prepare the statement of cash flows using the indirect method. 5. Refer to the Why is the indirect method used...
U.S. GAAP mandates accrual basis accounting for income recognition. However, the statement of cash flows is...
U.S. GAAP mandates accrual basis accounting for income recognition. However, the statement of cash flows is a mandatory financial statement as a part of a full set of financial statements. Why, if so much emphasis is placed on accrual basis accounting, must a statement of cash flows be presented? What is its purpose and how is it useful to stakeholders? Presenters of such statement may choose to present using the direct or indirect method. Discuss the similarities and differences between...
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Why is the statement of cash flows a useful document? What can creditors, investors, and other users learn from an analysis of the cash flow statement? What are the advantages and disadvantage of having a large cash balance? Using the Apple company, analyze and report on the statement of cash flows. (Comment on operating, investing, and financing activities)
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in summation of your discussion, the components of the statement of cash flows show how management is spending cash. Interpreting the statement of cash flows includes examining fundamental relationships such as cash-generating efficiency and free cash flow. Cash-generating efficiency, which focuses on net cash flows from operating activities, and it is the ability of a company to generate cash from operations. According to Brigham and Erhardt (2016), the statement of cash flows shows the effect on cash and cash equivalents...
The following information is taken from the operating section of the statement of cash flows (direct...
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The following information is taken from the operating section of the statement of cash flows (direct...
The following information is taken from the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.: Collections from customers Payments to suppliers for purchases Payments for operating expenses Payments for income taxes Cash provided by operating activities $28,000 (13,000) (9,000) (4,000) 2,000 The following information is obtained from the income statement of Battery Builders Net income Depreciation expense Gain on sale of equipment Write-off of intangibles $4,000 4,000 2,000 1,000 In addition, the following information...
In calculating the statement of cash flows, depreciation is added to net income because Group of...
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The following information is taken from the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.: Collections from customers Payments to suppliers for purchases Payments for operating expenses Payments for income taxes Cash provided by operating activities $ 28,000 (13,000) (9,000) (4,000) 2,000 The following information is obtained from the income statement of Battery Builders: Net income Depreciation expense Gain on sale of equipment Write-off of intangibles $ 4,000 4,000 2,000 1,000 In addition, the...
The following information is taken from the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.: Collections from customers Payments to suppliers for purchases Payments for operating expenses Payments for income taxes Cash provided by operating activities $28,000 (13,000) (9,000) (4,000) 2,000 The following information is obtained from the income statement of Battery Builders Net income Depreciation expense Gain on sale of equipment Write-off of intangibles $4,000 4,000 2,000 1,000 In addition, the following information...
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