Question

What accounts on the balance sheet must be evaluated when completing the financing activities section of the statement of cash flows?

A) Short-Term Liabilities and Long-Term Liabilities
B) Accounts Receivable and Inventory
C) Cash and Cash Equivalents
D) Long-Term Assets, such as Property, Plant, and Equipment

Answer 1

The financing activities section of the statement of cash flows requires an evaluation of both short-term and long-term liabilities on the balance sheet.

Step-by-step explanation:

When completing the financing activities section of the statement of cash flows, one must evaluate the Short-Term Liabilities and Long-Term Liabilities on the balance sheet.

These accounts reflect the borrowing and repayment of money, the issuance and repurchase of company shares, and the payment of dividends. It's essential to assess changes in these accounts to understand cash flow from financing activities.