Asked by Landon Johnson on May 09, 2024
Verified
With respect to the statement of cash flows:
A) increasing assets is always the predominant use of cash while borrowing is the predominant source of cash.
B) increases in assets are sources of cash and increases in liabilities are uses.
C) its most important function is to identify the principal sources and uses of cash.
D) All of the above
Statement of Cash Flows
A financial report detailing the cash inflows and outflows from operating, investing, and financing activities of a company over a period.
Borrowing
The act of receiving something from someone with the intention of returning it or its equivalent.
Increasing Assets
Refers to the growth or escalation in the value of assets owned by a business or individual.
- Identify diverse parts and activities that have an impact on the statement of cash flows and grasp the concept of cash flow management.
Verified Answer
AM
Angela MejiasMay 14, 2024
Final Answer :
C
Explanation :
Option A is incorrect as increasing assets may be a source or use of cash depending on the nature of the asset. Option B is incorrect as increases in liabilities may also be a source or use of cash depending on the reason for the increase. Option C is correct, as the primary purpose of the statement of cash flows is to identify the sources and uses of cash during a given period.
Learning Objectives
- Identify diverse parts and activities that have an impact on the statement of cash flows and grasp the concept of cash flow management.