The purposes of the statement of cash flows are to a. evaluate management decisions. b. determine ability to pay debts and dividends. c. predict future cash flows. d. All of the above

Question

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Answer 1

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Students have asked these similar questions

WHAT IS THE PURPOSE OF A STATEMENT OF CASH FLOWS?A. TO ANALYSE CHANGES IN EQUITY B. TO SHOW THE FINANCIAL POSITION C.TO REPORT FINANCIAL PERFORMANCE D.TO ANALYSE CHANGES IN CASH AND CASH EQUIVALENTS

Describe the procedure to prepare Cash Flow Statement.

Assets and liablities are classified on the balance sheet into correct and long-term categories in order to a. determine the value of the businessb. determine the cash flows of the businessc. yield information about liquidityd. distinguish them from extraordinary items

Answer 2

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 3

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 4

Textbook Question

Chapter 14, Problem 1QC

The purposes of the statement of cash flows are to

a. evaluate management decisions.

b. determine ability to pay debts and dividends.

c. predict future cash flows.

d. All of the above

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

Answer 8

Expert Solution & Answer

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer to Problem 1QC

(d) All the above

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).

Conclusion

Therefore, the correct option is (d).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Statement of cash flows

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The purpose of the statement of cash flows.

Answer 12

Answer to Problem 1QC

(d) All the above

Answer 13

Explanation of Solution

Explanation for correct answers:

Purpose of statement of cash flows are given below:

To predict future cash flows of the business,
To determine the ability of the business to pay dividend and settle debts, finally
To evaluate the management decision.

Hence, (d) is the correct option because all the stated purposes of statement of cash flows.

Explanation for incorrect answers:

Option (a) is incorrect because evaluate management decision alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (b) is incorrect because determine ability to pay debt and dividend alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).
Option (c) is incorrect because predict future cash flows alone is not the purpose of statement of cash flows. Purpose of statement of cash flows refers to all the activities mentioned in options (a), (b), and (c).