The statement of cash flows provides a link between two balance sheets by showing how net income (or loss)has changed owners' equity from one balance sheet date to the next.

Question

Quizplus · Accepted Answer

The statement of cash flows provides information on how a company's cash position has changed over a period due to operating, investing, and financing activities, not directly how net income has changed owners' equity. The statement that links two balance sheets by showing how net income and other items have changed owners' equity is the statement of retained earnings or the statement of changes in equity.

The Statement of Cash Flows Provides a Link Between Two