Cash flows
A)always follow the adjusting entries.
B)always precede the adjusting entries.
C)may precede or follow the adjusting entries.
D)always follow the unadjusted trial balance.
E)always precede the closing entries.

Question

Quizplus · Accepted Answer

Cash flows can occur before or after adjusting entries, depending on the timing of the actual events. Adjusting entries are made to ensure that financial statements accurately reflect the financial position of the company at the end of a reporting period. Cash flows, on the other hand, represent the movement of cash in and out of the company, regardless of whether the transactions have been recorded or adjusted. Therefore, cash flows may precede or follow adjusting entries, and there is no fixed relationship between the two.

Cash Flows