Abbey Corporation paid $450 for an advertisement that appeared in last Sunday’s Kansas City Star. How does this transaction impact the Statement of Cash Flows?

The correct answer is: Cash outflow in the operating section.

Explanation:

The statement of cash flows is the basic financial statement that shows the cash generated and used in the operation, investment and financing activities. The change of the different items in the Balance Sheet that affect cash must be determined for its implementation.

The purpose of the statement of cash flows has to do with informing the generation and use of cash and cash equivalents in relation to operation, financing and investment activities.

The objective of this statement is to present pertinent and concise information, relating to cash collections and disbursements of an economic entity during a period so that users of financial statements have additional elements to examine the entity's ability to generate future cash flows. effective, to assess the ability to meet its obligations, determine internal and external financing, analyze the changes presented in cash, and establish the differences between net income and collections and disbursements.

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