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

Question

Quizplus · Accepted Answer

Cash flows from financing activities mainly impact noncurrent liabilities and equity accounts, as they are related to raising funds from external sources such as issuing bonds or stocks, paying dividends, and paying back loans. Cash flows from financing activities do not affect noncurrent assets, net income, or current assets and liabilities as they are related to a company's operations and investing activities.

When Analyzing the Changes on a Spreadsheet Used to Prepare