Question
In: Finance
________ are an accounting measure of performance during a specific period of time, while ________ is...
________ are an accounting measure of performance during a specific period of time, while ________ is the actual inflow or outflow of money. Profits; cash flow Cash flows; profit Dividends; cash flow Profits; a dividend
Solutions
Expert Solution
The Correct answer would be Profits ; Cash flow
Profits are an accounting measure of performance during a specific period of time, while Cash flows is the actual inflow or outflow of money.
Profits - To measure performance of a business we use profits as an indicator. Profit is used to measure financial performance of an enterprise. Accounting profit can be defined as the surplus made by the business during a period of time. Profits serves to evaluate the performance of a business.
Cash flows - It shows the actual inflow or outlow of cash made by the business. It is also referred to as statement of cashflows which shows the particulars of cash received and spent/paid by the business. A cash flow statement shows the actual inflow or outflow of cash from:
- Operating Activities
- Investing Activities
- Financing Activities
Therefore it can be concluded that Cash flows is the actual inflow or outflow of money.
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