Question

When a company wants to determine how its operating, investing, and financial activities affect cash during an accounting period, it will have a prepared.

Answer 1

Answer:

Statement of Cash flows

Explanation:

The statement of cash flows shows the activities responsible for the change in the amount of cash held by an organization between the beginning and end of a period.

It is usually prepared using the direct and indirect methods.

The activities of the organization are usually recognized in 3 parts namely; Operating activities, investing activities and financing activities.

The operating activities include elements such as net profit, non cash items, change in current assets and liabilities.

The investing activities include cash flows from the disposal and purchase of assets etc

The financing activities includes cash flows from the disposal and sale of shares etc.

Hence when a company wants to determine how its operating, investing, and financial activities affect cash during an accounting period, it will have a prepared statement of cash flows.