How is the comparative balance sheet related to the statement of cash flows when

Question

How is the comparative balance sheet related to the statement of cash flows when accounting for the purchase of property, plant, or equipment?

a.  The comparative balance sheet shows the increase to the Property, Plant, and Equipment account during the year, and the statement of cash flows shows how the purchase of the property, plant, or equipment was financed.

b.  The comparative balance sheet shows the depreciation expense associated with the Property, Plant, and Equipment account, and the statement of cash flows shows how the depreciation expense for the property, plant, and equipment is paid.

c.  The comparative balance sheet itemizes the market price and discounts associated with the Property, Plant, and Equipment account, and the statement of cash flows shows only the final price associated with the property, plant, and equipment.

d.  The comparative balance sheet shows the total value of the Property, Plant, and Equipment account , and the statement of cash flows shows the amount of annual depreciation associated with the property, plant, or equipment.

Explanation / Answer

Answer is :

a.  The comparative balance sheet shows the increase to the Property, Plant, and Equipment account during the year, and the statement of cash flows shows how the purchase of the property, plant, or equipment was financed.

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