Q16RQ - Horngren'S Financial And Managerial Accounting

Question

Why might a spreadsheet be helpful when completing the statement of cash flows?

Step-by-Step Solution

Answer

The spreadsheets help in the creating cash flow statement because it makes the calculation of cash flow statement from the balance sheet and profit and loss accounts easier.

Step 1 Definition of break-even point

The statement of cash flow is defined as the financial statement which records the movements of cash outflow and inflow throughout the year of the company.

Step 2 Usage of the spreadsheet when completing the statement of cash flows

The spreadsheets are useful for the companies in preparing the cash flow statement because the companies face complex situations. It helps in detailing the opening and ending balances of the accounts on the balance sheet as well as the debit and credit accounts.