The primary objective of the statement of cash flows is to provide information about a company's:
A) Cash receipts and disbursements.
B) Noncash financing and investing activities.
C) Financial position.
D) Profitability.

Question

Quizplus · Accepted Answer

The primary objective of the statement of cash flows is to provide information about a company's cash receipts and disbursements. It shows the inflows and outflows of cash from operating, investing, and financing activities. This helps investors and analysts understand a company's liquidity and ability to meet its financial obligations. Noncash financing and investing activities are also reported but are not the primary focus of the statement. Financial position and profitability are reported on the balance sheet and income statement, respectively.

The Primary Objective of the Statement of Cash Flows Is