A statement of cash flows can be prepared using:
A) reconstruction of ledgers approach
B) formula approach
C) spreadsheet approach
D) all of the above

Question

Quizplus · Accepted Answer

All of the listed approaches can be used to prepare a statement of cash flows. However, different businesses may have different preferences and expertise in using these approaches. The reconstruction of ledgers approach involves reviewing all cash transactions and reconciling them to the corresponding entries in ledgers or bank statements. The formula approach uses predetermined formulas to calculate changes in cash and cash equivalents for each section of the statement of cash flows. The spreadsheet approach involves using software such as Microsoft Excel to perform calculations and generate the statement of cash flows.

A Statement of Cash Flows Can Be Prepared Using