We have used transaction analysis and the accounting equation to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet of the assets,liabilities,and stockholders' equity of the company.If you wanted to prepare a statement of cash flows with this spreadsheet,which column would you use?
A)Cash column
B)Accounts Receivable column
C)Retained Earnings column
D)Revenue column

Question

Quizplus · Accepted Answer

The statement of cash flows shows the inflows and outflows of cash for a specific period. Thus, the most appropriate column to use for preparing this statement would be the cash column, as it would provide information on the actual cash transactions that have occurred during the period. The accounts receivable column would show amounts owed to the company, which is not relevant for the cash flow statement. The retained earnings and revenue columns are also not relevant, as they do not provide information on cash transactions.

We Have Used Transaction Analysis and the Accounting Equation to Record