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  3. 1) the cash flow statement's primary purpose is to

1) The cash flow statement's primary purpose is to provide information ...

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Question

Accounting

1) The cash flow statement's primary purpose is to provide information

about the changes in assets, liabilities, and owners' equity of an entity during a period.

about the cash receipts and cash payments of an entity during a period.

about the entity's ability to meet its obligations and to pay dividends.

that is useful in assessing future cash flow prospects.

2)

In a period of rising prices, the inventory method which tends to give the lowest reported cost of goods sold is

FIFO.

LIFO.

average cost.

None of these choices are correct.

3)

Which of the following statements is (are) true? (I) Company should add back realized gains to net income to arrive at net cash flow from operating activities. (II) Companies report the cash flows from purchases and sales of trading securities as cash flows from operating activities.

I only

II only

Both statements are true

Both statements are false

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