Regarding the use of a spreadsheet for the preparation of the statement of cash flows,which of the following statements is TRUE?
A) The T-account approach works well for all companies.
B) The statement of cash flows cannot be prepared directly from the spreadsheet because additional information is needed.
C) The spreadsheet is needed when companies face complex situations.
D) The spreadsheet can only be used if the indirect method for operating activities is also used.

Question

Quizplus · Accepted Answer

The use of a spreadsheet for the preparation of the statement of cash flows is particularly helpful when companies face complex situations, such as significant non-cash items or transactions in multiple currencies. However, it is important to note that additional information may still be needed to complete the statement of cash flows accurately. The T-account approach may not work well for all companies as it may be too simplistic for more complex organizations. The statement of cash flows can be prepared directly from the spreadsheet using either the indirect or direct method for operating activities.

Regarding the Use of a Spreadsheet for the Preparation of the Statement