Please fix this.

  • This topic has 1 reply, 2 voices, and was last updated 1 month ago by Brian Hock.
  • Creator
    Topic
  • #238562
    Ali Ikram
    Participant

    Which of the following statements is false?

    • A. Fixed assets consist of assets that a retail or wholesale company acquires for resale or goods that manufacturers produce for sale.correct
    • B. Investments are classified as current if management intends to liquidate the investment in the near future.
    • C. The balance sheet provides information useful for assessing future cash flows, liquidity, and long‐term solvency.wrong
    • D. Current assets include cash and all other assets expected to become cash or be consumed within one year (or within the operating cycle, whichever is longer).

    The correct answer per your system is A. Although it could be C because the Balance sheet is not useful for assessing future cash flows. That is the cash flow statement/

Viewing 1 replies (of 1 total)
  • Author
    Replies
  • #238565
    Brian Hock
    HOCK international

    Hello, Ali Ikram,

    While the statement of cash flows provides more information about cash flows, I would not say that it provides a lot of assessment of future cash flows. With the balance sheet there is information about receivables, which would provide some information about future cash flows. So, even if you wanted to say that the SCF provides more information about future cash flows, the balance sheet does provide some information about future cash flows. And choice A is clearly a false statement, which makes it the correct answer to this question.

    Brian

Viewing 1 replies (of 1 total)
  • You must be logged in to reply to this topic.