Purposes of cash flow statement


Please answer the following question:

Question1: If sales on an accrual basis are $450,000 and accounts receivable decrease by $45,000, the cash received from customers would be.

Cannot be determined

  • $450,000
  • $495,000
  • $405,000

Question 2: Operating activities are most closely related to

  • Current assets and current liabilities
  • Dividends and treasury stock.
  • Long-term assets
  • Long-term liabilities and stockholders' equity.

Question 3: Tony Enterprises had accounts receivable of $30,000 at the beginning of the year and $81,000 at year-end. Sales revenue for the year totaled $174,000. How much cash did the business collect from customers?

  • $79,500
  • $123,000
  • $174,000
  • $93,000

Question 4: The purposes of cash flow statement are to

  • Determine ability to pay liabilities and dividends
  • Evaluate management decisions.
  • Predict future cash flows.
  • All of the above

Note: Explain in detail.

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Accounting Basics: Purposes of cash flow statement
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