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r-ruslan [8.4K]
3 years ago
10

Explain whether the Statement of Cash Flows is able to illustrate the ‘liquidity’ of an entity to its users and provide ONE reco

mmendation how companies can maintain liquidity during this pandemic.
Business
1 answer:
Yuliya22 [10]3 years ago
6 0

Answer:

A cash flow is an important part of an organisation. it helps in understanding the cash flows from investing, operating and financial activities.

A cash flow statement helps in evaluating the liquidity of a company.

During the current Pandemic, maintaining liquidity is very important.

some business functions freezes. such firm will experience cash operating cots. the firm should have enough cash to maintain the business in moving forward.

Explanation:

Solution

A cash flow statement is a vital parts or components provided by an organisation.i t helps in interpreting the cash flows from investing, operating and financial activities or functions.

An organisation income statement is made ready based on the accrual basis and so it does help or aid in the understanding the movement of cash during.

A cash flow statement helps in evaluating the liquidity of a company.

Operating activities of cash flows is computed or estimated by putting Non cash expense to net income and then deducting current liabilities and assets.

Cash flow from operating activities are necessary to the firm because it helps  in providing  cash to invest assets and payback of debt.

Maintaining liquidity during the present pandemic has become very necessary.

Since business functions  freezes, the firm will experience cash operating cots. hence the firm should have sufficient cash to maintain the business running.

The firm can also take a loo at their current assets to see if it can be converted to cash on quickly basis.

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The basic summary device of accounting is the
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What environmental advantages would there be in having fewer transactions?
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Less Of an Imcome

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3 years ago
Total revenue equals A. change in price per unit times quantity sold. B. price per unit times change in quantity sold. C. price
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C. price per unit times quantity sold.

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7 0
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1/1/2019 sally miller purchased $500 of merchandise on account; the cost of the item is $310
timofeeve [1]

<u>Solution and Explanation:</u>

date                           Particulars                                  Debit                    Credit

1st january, 2019    Account receivable                  500

                                Sales revenue                                                            500

                    (To record sales on account)

                        Cost of goods sold                              310

                       Merchandise inventory                                                      310

             (To record cost of goods sold)

31st january, 2019       Notes receivable                     500

                                 Accounts receivable                                                 500

(To record notes receivable for the 60 days at the rate of 6 percent)

1st April, 2019 Allowances for Doubtfull accounts          500

                        Notes receivable                                                                500

(In order to write off Sally Millers account, no interest revenue is to be recognised)

2nd May, 2019           Notes receivable                             500

                              Allowances for doubtful debts                                     500

( in order to record re-instatement)

2nd May, 2019             Cash                                                  507.50

                                  Notes receivable                                                        500

                               Interest revenue                                                             7.5

( In order to record the payment received)

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3 years ago
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