Question Details

The statement of cash flows should help investors and creditors 



1.	The statement of cash flows should help investors and creditors assess each of the following except the
a.	entity's ability to generate future income.
b.	entity's ability to pay dividends.
c.	reasons for the difference between net income and net cash provided by operating activities.
d.	cash investing and financing transactions during the period.


	2.	The statement of cash flows
a.	must be prepared on a daily basis.
b.	summarizes the operating, financing, and investing activities of an entity.
c.	is another name for the income statement.
d.	is a special section of the income statement.


	3.	Which one of the following items is not generally used in preparing a statement of cash flows?
a.	Adjusted trial balance
b.	Comparative balance sheets
c.	Current income statement
d.	Additional information


	4.	The primary purpose of the statement of cash flows is to
a.	provide information about the investing and financing activities during a period.
b.	prove that revenues exceed expenses if there is a net income.
c.	provide information about the cash receipts and cash payments during a period.
d.	facilitate banking relationships.





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