Home › CS Executive › corpacc › Introduction to Financial and Corporate Accounting › The lesson positions a Cash Flow Statement as ad…
The lesson positions a Cash Flow Statement as additional information to the user of financial statements. According to the lesson, what does a Cash Flow Statement chiefly help to assess?
Answer & Solution
Correct answer: B.
1. The lesson treats the Cash Flow Statement as a supplement to financial statements.
2. It exhibits cash inflows, outflows and cash equivalents over the period.
3. The lesson states it is a tool for assessing the liquidity and solvency of the enterprise.
4. Market price, credit rating and tax computation are not the chief purpose stated in the lesson.
_Source: ICSI CS Executive Paper 5 (Corporate and Management Accounting) — Lesson 1 & 2: Introduction to Financial and Corporate Accounting, pp. v–vii and x._
Related questions
The lesson sketches a nine-step accounting cycle. Which step is described in the cycle as The Time Period assumption is one of the four listed accounting assumptions. Which statemeThe Business Entity assumption is one of the four listed accounting assumptions. Which staAccounting Standards (AS) are described in the lesson as written policy documents issued bRevenue Realisation is listed in the lesson as an accounting concept. Under this concept, Consistency is listed by the lesson as one of the accounting constraints. Which statement Full Disclosure is listed by the lesson as one of the accounting concepts. Which statementThe Matching concept is listed by the lesson alongside Revenue Realisation under the broad