Asked by Emily Lutsock on Jul 09, 2024
Verified
The cash flow statement explains why a firm's cash position has changed between successive balance sheet dates while simultaneously explaining the changes that have taken place in the firm's noncash asset,liability,and stockholders' equity accounts over the same period.
Cash Flow Statement
A financial document providing comprehensive detail about a company's cash inflows and outflows over a specified period.
Noncash Asset
Assets owned by a business not in the form of cash but may be converted into cash within a year, such as inventory and property.
- Acquire an understanding of the connection between cash flow statements and modifications in the balance sheet, along with the critical role of investing activities.
Verified Answer
CP
Chitra PudasainiJul 11, 2024
Final Answer :
True
Explanation :
The cash flow statement shows the sources and uses of cash during a specified period of time, and it reconciles the beginning and ending cash balances on the balance sheet. It also explains the changes in noncash accounts, such as accounts receivable, accounts payable, and inventory, that affect cash flow. Therefore, the statement explains why a firm's cash position has changed between successive balance sheet dates while simultaneously explaining the changes that have taken place in the firm's noncash asset, liability, and stockholders' equity accounts over the same period.
Learning Objectives
- Acquire an understanding of the connection between cash flow statements and modifications in the balance sheet, along with the critical role of investing activities.
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