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

Question

Quizplus · Accepted Answer

Cash flows from financing activities generally affect noncurrent liabilities and the equity accounts, as financing activities involve raising and repaying funds through borrowing, issuing and buying back shares, and paying dividends. They do not affect net income, current assets, or current liabilities, which are affected by cash flows from operating and investing activities. Noncurrent assets could be affected if they were financed through long-term borrowing or issuing bonds, but this is not always the case.

When Analyzing the Changes on a Spreadsheet Used to Prepare