BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
4 views

The difference between the beginning and ending cash balances shown on the balance sheet

  1. a. is added to net income to obtain total cash inflows.
  2. b. serves as a control figure for the statement of cash flows.
  3. c. is deducted from net income to obtain net cash inflows.
  4. d. is the source of all investing and financing activities
  5. e. is both c and d.

To determine

Identify the option which correctly states the difference between the beginning and ending cash balances shown on the balance sheet.

Explanation

Cash Flow Statement:

Cash flow statement is a financial statement prepared to provide information about the sources and uses of cash in a firm. In this statement, the activities increasing cash are referred as cash inflows and the activities that decrease cash are referred as cash outflows.

b.

The difference between the beginning and ending cash balance shown on the balance sheet serves as a control figure for the statement of cash flows. The calculation of the cash inflows and outflows of a company from operating, investing and financing activities is made on this amount. Therefore, b is the correct option.

a.

The difference between the beginning and ending cash balances shown on the balance sheet is not even added to net income to obtain total cash inflows. To obtain the total cash inflows, any increase in liabilities and decrease in current assets are added...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What kinds of behavior do the antitrust prohibit?

Principles of Economics (MindTap Course List)

What are some actions that stockholders can take to ensure that managements and stockholders interests are alig...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Define the three processes of the process value chain.

Cornerstones of Cost Management (Cornerstones Series)