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m?studentkey-154644 n.com/compxm/studentexam/boardquery/boardquery js.cfm'studentKey-15464428gsimid C595598ksimids C92843&round-6; COMPXM Business Policy Exam Points: 25 02006 Capsim Management Simulations, Inc.® 4 out of 16 The statement of cash Sows for Baldwin Company shows what happens in the Cash account during the year. It can be seen our next e Quiz of the sources and uses of cash (sources of cash are added, uses of cash are subtracted) Please answer which of the tollowing is true i Baldwin's accounts payable goes down Select: 1 Save Answer Points 10 10 itís a source of cash, and wil be showname operating section as an addition lt is a use of cash, and wil be shown in the financing section as a subtraction Iti, a use of cash, and wil be shown n the operating section as a subtraction. ltisasource of cash and wil be shown inthe financing section as as adaton fro rk q 25 ques 10 15 CON Mv TextboExplanation / Answer
The financing activity in the cash flow statement focuses on how a firm raises capital and pays it back to investors through the capital markets. These activities also include paying cash dividends, adding or changing loans, or issuing and selling more stock. This section of the statement of cash flows measures the flow of cash between a firm and its owners and creditors. A positive number is going to indicate that cash has come into the company, which boosts its asset levels. A negative figure indicates when the company has paid out capital, such as paying off long-term debt or making a dividend payment to shareholders.
Examples of more common cash flow items stemming from a firm’s financing activities are:
By taking net income on the income statement and making adjustments to reflect changes in the working capital accounts on the balance sheet (receivables, payables, inventories), the operating cash flow section shows how cash was generated during the period. Operating activities records a company's operating cash movement, the net of which is where operating cash flow (OCF) is derived.
From above descriptions, it is therefore clear that “Accounts payable” is part of Operating activity in the cash flow . Also, tf accounts payable goes down , Cash for company increases and thus is a source of cash.
Hence , answer would be :
IT IS A SOURCE OF CASH AND WILL BE SHOWN IN THE OPERATING SECTION AS AN ADDITION
IT IS A SOURCE OF CASH AND WILL BE SHOWN IN THE OPERATING SECTION AS AN ADDITION
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