True or False: 1. The statement of cash flows identifies cash flows separated in

Question

True or False:

1. The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

2. Ending capital reported on the statement of owner's equity is calculated by adding owner investments and net losses and subtracting net income and withdrawals.

3. The time period assumption assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.

4. Interim financial statements report a company's business activities for a one-year period.

5. Adjusting entries result in a better matching of revenues and expenses for the period.

6. Two main accounting principles used in accrual accounting are expense recognition and full closure.

7. The expense recognition (matching) principle does not aim to record expenses in the same accounting period as the revenue earned as a result of these expenses.

8. The cash basis of accounting commonly increases the comparability of financial statements from period to period.

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

Statement of cash flows is a part of annual Financial Statements of a company and shows the cash flows generated and utilized by a company in different activities which are categorized into Operating Activities (Principal Business Activities), Investing Activities (Investment activities of a company) and Financing Activities (Procuring and utilizing Funds)

So, the above statement is True

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