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WGU C213 Topic Five Study Guide Questions and Answers 100% Pass $13.49
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WGU C213 Topic Five Study Guide Questions and Answers 100% Pass
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WGU C213 Topic Five Study Guide Questions and Answers 100% Pass Cash flows are partitioned into three categories... - ANSWER -operating (most important) investing (second most important) financing (third most important) (also have to include non-cash investing and financing transactions) the ...

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  • December 17, 2024
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  • 2024/2025
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WGU C213 Topic Five Study Guide
Questions and Answers 100% Pass

Cash flows are partitioned into three categories... - ANSWER ✔✔-operating (most important)


investing (second most important)


financing (third most important)




(also have to include non-cash investing and financing transactions)


the statement of cash flows provides what? - ANSWER ✔✔-information that is not readily apparent by

looking at just the balance sheet and the income statement




Operating cash flow is particularly useful in selected cases when net income does not give an accurate

reflection of a company's performance.


how do you prepare a statement of cash flows? - ANSWER ✔✔-One simply scans the list of cash

transactions and sorts them into operating, investing, and financing items.


how to prepare a statement of cash flows when detailed cash flow information is not available? -

ANSWER ✔✔-a statement of cash flows can be prepared using knowledge of how the three primary

financial statements articulate. Operating cash flow can be reported using either the direct or the indirect

method.




Created by ©EmilyCharlene 2025. All rights reserved.

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6 step process


statement of cash flows - ANSWER ✔✔-summarizes a company's cash flows for a period of time




reports cash inflow and cash outflow during a period, with an emphasis on the amount of CASH

GENERATED BY OPERATIONS


income statement and statement of cash flows are not replacements for each other - ANSWER ✔✔-each

have a different purpose




income statement measures the results of operations for a period of time and the statement of cash flows

reports the period's transactions and events in terms of their impact on cash


the birth of the statement of cash flows - ANSWER ✔✔-created in the US in 1988


why was the statement of cash flows created? - ANSWER ✔✔-sometimes earnings fail, everything is one

page, its a powerful forecasting tool


sometimes earnings fail (net income) - ANSWER ✔✔-- big loss scenario: earnings are too pessimistic

(makes things look worse than they are)




- rapid growth scenario: earnings are too optimistic (if something happens, a lot of other things need to be

done. faster growth = harder things will be)




- reality check scenario: earnings are too "iffy" (not as reliable)




Created by ©EmilyCharlene 2025. All rights reserved.

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everything is on one page - ANSWER ✔✔-operating activities (things we do routinely every day, the

reason we are in business)




investing activities (expanding the productive capacity of the business)




financing activities (getting the cash for a new expansion and distributing cash to those who have

provided financing in the past)


forecasting tool - ANSWER ✔✔-imposes practical numerical discipline on exciting entrepreneurial plans

for the future




(teaching tool) proper understanding of the statement of cash flows links the balance sheet and the

income statement through an understanding of business events


pro forma - ANSWER ✔✔-a predication "forecast" of what the actual cash flow statement will look like in

future years if the operating, investing, and financial plans are implemented




if you don't like the implications of the forecast, you must change one or more of the assumptions


The statement of cash flows replaces the




Balance sheet


Statement of financial position


Income statement



Created by ©EmilyCharlene 2025. All rights reserved.

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