A statement of cash flows explains the differences between the beginning and ending balances of: Multiple...

A statement of cash flows explains the differences between the beginning and ending balances of:

Multiple Choice

Cash, cash equivalents, and short-term investments. Working capital. Net income. Equity. Cash and cash equivalents.

Expert Solution

Correct asnwer is Cash and cash equivalent

A statement of cash flow is prepared for the year to explain the net cash used or flow from the activities in the current year.It explains the difference between the begining and ending cash and cash equivalent balances.

Three activities that the cash flow sattement is divided into are

1 Operating activities-Activities related to operations of the current year and working captal requirement

2 Investing activities-Activities related to capital investment, purchase of equipment etc

3 Financing activities-Activities related to financing needs of company such as taking loans and issuing equity.

Cash flow sattement record only the transaction that were affected in cash under the direct method

ekkarill92 answered 1 year ago

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