11 1 identify the purposes of the cash flow statement 1 a comparative balance sheet 4351934

11.1   Identify the purposes of the cash flow statement

1) A comparative balance sheet reports at least two consecutive years of ending cash balances that can be used to compile a cash flow statement.

2) The cash flow statement is prepared to show why the cash amount changed from the beginning of the period to the end of the period.

3) A cash flow statement shows the company's sources of cash, but does not detail how the cash was used by the company.

4) Past cash receipts and payments do NOT help to predict:

A) management decisions.

B) ability to pay debts.

C) future cash flows.

D) future net income.

E) ability to pay dividends.

5) In order to help the business prosper, a cash flow statement can aid in all EXCEPT:

A) predicting future net income.

B) predicting future cash flows.

C) evaluating management decisions.

D) ability to pay debts.

E) ability to pay dividends.

6) In order to determine why net income and cash on the balance sheet do not equal, an accountant can prepare a(n):

A) income statement.

B) statement of retained earnings.

C) balance sheet.

D) cash flow statement.

E) statement of owner's equity.

7) The accuracy of the cash flow statement can be verified by computing the change in the balance of the:

A) cash and cash equivalent accounts.

B) equity account.

C) revenue accounts.

D) asset and liability accounts.

E) expense accounts.

8) Identify the sources and uses of cash reported on the cash flow statement. 

9) Which financial statement represents a point in time?

10) The __________ is the financial statement associated with the operating, investing, and financing activities of a corporation.

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