Quiz Ch 11 – T/F Limitation of Cash Flow Statement in Predicting Future Cash Flows
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
A cash flow statement cannot aid in forecasting future cash flows.
A cash flow statement cannot aid in forecasting future cash flows.
Profitable businesses require both net income and robust cash flows.
The statement of cash flows is also acknowledged as an optional statement.
The direct method of reporting operating cash flows on the statement of cash flows is favored by both the FASB and IASB.
The cash flow statement clarifies the changes in the cash balance during a specified period.
A cash flow statement records a company’s cash inflows and outflows at a specific moment.
If interest payable increases during the reporting period, it suggests that the cash paid for interest was higher than the interest expense reported on the income statement.
In the statement of cash flows, the net cash provided by operating activities is usually the same as the operating income.
How is the purchase of treasury stock reported on a statement of cash flows?
The balance sheet is the sole financial statement utilized for the preparation of the statement of cash flows.