Management never uses the statement of cash flows to determine whether short-term financing is necessary to pay current liabilities.

Question

Quizplus · Accepted Answer

Management commonly uses the statement of cash flows to determine whether short-term financing is needed to pay current liabilities. This is because the statement of cash flows shows the inflows and outflows of cash, including operating activities, investing activities, and financing activities, which all affect a company's cash position. By analyzing the statement of cash flows, management can determine whether the company has enough cash to meet its current obligations and make decisions about financing as needed.

Management Never Uses the Statement of Cash Flows to Determine