Which financial statement primarily explains the movement of cash and cash equivalents during an accounting period?
Correct answer: C. Cash flow statement
- A. Income statement
- B. Statement of changes in equity
- C. Cash flow statement
- D. Statement of financial position
Explanation
The cash flow statement classifies cash movements into operating, investing and financing activities. The income statement measures accounting profit, which may include non-cash items.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
A company reports sales of Rs. 2,000,000 and cost of goods sold of Rs. 1,200,000. What is its gross profit margin?
The cost of debt used in calculating a company's after-tax financing cost is usually adjusted because interest expense:
According to the traditional pecking order view, a company normally prefers which sequence when raising finance?
A depreciation expense is added back to accounting profit when preparing cash flow from operations under the indirect method because depreciation:
A project has an internal rate of return of 14%, while the company's required rate of return is 11%. Based only on the IRR rule, the project should be:
If a business increases its use of fixed-interest debt while operating income remains unchanged, which measure is most directly affected?