Nordic Exports Inc.reported net income of $150,000 for 2017,but its cash balance decreased $40,000.Which financial statement should Nordic Exports' management refer to for an explanation of this situation?
A)Balance sheet
B)Income statement
C)Statement of retained earnings
D)Statement of cash flows

Question

Quizplus · Accepted Answer

The Statement of cash flows provides information about the inflow and outflow of cash during a specific period, which would help management understand why the cash balance decreased despite having net income. It explains the changes in cash by categorizing them into operating, investing, and financing activities.