When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:
A) Noncurrent liability and equity accounts.
B) Noncurrent assets.
C) Net income, current assets, and current liabilities.
D) Equity accounts only.
E) Both noncurrent assets and noncurrent liabilities.

Question

Quizplus · Accepted Answer

Cash flows from operating activities primarily affect the current assets and liabilities and net income. They represent the cash flows that result from day-to-day business operations, such as cash received from customers and cash paid to suppliers. Noncurrent assets and liabilities are more long-term in nature and are typically affected by cash flows from investing and financing activities. Equity accounts can be affected by all three categories of cash flows.

When Analyzing the Changes on a Spreadsheet Used to Prepare