BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Which of the statements below is FALSE?
|
|
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.
|
|
|
Cash flow from assets shows the success or failure of the operating decisions.
|
|
|
Cash flow to owners shows cash paid to owners plus any new borrowing from owners
|
|
|
Cash flow to creditors shows a portion of how the firm is financing the operations
|
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.