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A company reported net income of $150,000 for the current year, but its cash balance decreased by $40,000. Which financial statement should management refer to for an explanation of this situation?

a.Balance Sheet

b.Income Statement

c.Statement of retained Earnings

d.Statement of Cash Flows

A company reported a net loss of $30,000 for the current year, yet its cash balance increased during the year. Which financial statement should management refer to for an explanation of this situation?

a.Balance Sheet

b.Statement of Retained Earnings

c.Statement of Cash Flows

d.Income Statement

A company reported net income for the current year. Which of the following business transactions would cause its cash from operating activities to be higher than its net income?

a.Cash dividends were paid to stockholders during the year.

b.Equipment was purchased for cash during the year.

c.Depreciation expense was recorded for the year.

d.A bank loan was repaid during the year.

Which of the following is not a current reporting requirement for a statement that reports changes in cash over a period of time?

a.This statement must classify cash flows into three categories: operating, investing, and financing activities.

b.Cash equivalents must be combined with cash in preparing this statement.

c.Working capital may be used as a substitute for cash in preparing this statement.

d.The title for this statement is "Statement of Cash Flows."

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