Which statement is true?
A) The cash flow statement summarises the movements in the bank account over an accounting period.
B) The cash flow statement explains the changes between the income statement and the balance sheet.
C) The balance sheet links two income statements.
D) None of the statements is true.

Question

Quizplus · Accepted Answer

The cash flow statement shows the inflows and outflows of cash during a particular period, thus summarizing the movements in the bank account. Option B is incorrect as the cash flow statement does not explain changes between the income statement and balance sheet. Option C is incorrect as the balance sheet shows the financial position of the company at a particular point in time and does not link two income statements.

Which Statement Is True