BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the statements below is FALSE?
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The cash that the firm generates from its operating decisions (use of its assets) is used to either pay creditors or the owners of the company.
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Cash flow from assets shows the success or failure of the operating decisions.
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Cash flow to owners shows cash paid to owners plus any new borrowing from owners
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Cash flow to creditors shows a portion of how the firm is financing the operations
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Explanation:
Detailed explanation-1: -It reconciles ending cash balance with the balance as per bank statement is incorrect about the statement of cash flows.
Detailed explanation-2: -Purchase of equipment for cash is not an operating cash flow.
Detailed explanation-3: -The amount received from purchasing activities is not included in the cash flow statement.
Detailed explanation-4: -Answer and Explanation: Correct statement: c) In the statement of cash flows, a decrease in inventories is reported as a source of cash.
There is 1 question to complete.