1.Statements of cash flows provide information that allows users to make more de
ID: 2456512 • Letter: 1
Question
1.Statements of cash flows provide information that allows users to make more detailed judgements about which aspect of the business? Choose one answer. a. Financial performance. b. Liquidity. c. Financial position. d. Financial stability. e. Profitability.
2.
Which of the following transactions is an example of an investing activity?
Cash receipts from customers.
Payment of accrued salaries.
Cash payment for the purchase of property, plant and equipment.
Sale of inventory at a 40% mark-up.
Collection of monies owed by accounts receivable.
a.Cash receipts from customers.
b.Payment of accrued salaries.
c.Cash payment for the purchase of property, plant and equipment.
d.Sale of inventory at a 40% mark-up.
e.Collection of monies owed by accounts receivable.
Explanation / Answer
1) B- Liquidity.
The cash flow satement reports the cash generated and spent during the year.It helps in determining short term viability of the company i.e.the liquidity that it has abililty to pay the bill.
2) Answer is C- Cash payment for the purchase of property,plant and equipment.
Other options are related with the operations i.e the regular business of the organisation. Investing activity includes buying and selling of long term assets and other long term investments.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.