Multiple Choice
The statement of cash flows does not include which of the following sections?
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13. Statement of Cash Flows
Introduction to the Statement of Cash Flows
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A social audit systematically evaluates which of a firm's performance metrics?
A
Inventory turnover ratio
B
Social and environmental impact
C
Net income and profitability
D
Cash flows from operating activities
Verified step by step guidance1
Understand the concept of a social audit: A social audit is a process that evaluates a firm's social and environmental impact, rather than financial metrics like inventory turnover ratio, net income, profitability, or cash flows.
Identify the purpose of a social audit: It focuses on assessing how a company contributes to society and the environment, including ethical practices, sustainability, and community engagement.
Differentiate between financial metrics and social metrics: Financial metrics such as inventory turnover ratio, net income, and cash flows measure financial performance, while social audits focus on non-financial aspects like social responsibility and environmental stewardship.
Recognize the scope of social audits: They may include evaluating labor practices, environmental policies, community involvement, and adherence to ethical standards.
Conclude that the correct answer is 'Social and environmental impact,' as this aligns with the purpose and scope of a social audit.
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