What is the purpose of the statement of cash flows?
A) It is intended to provide a cash-based view of a company.
B) It illustrates the profitability of a company.
C) It reports the financial position of a company at a specific point in time.
D) It outlines the changes in stockholders' equity accounts from the beginning of the period to the end of the perioD.
The statement of cash flows shows each major type of business activity that caused a company's cash to increase or decrease during the accounting perioD.

Question

Quizplus · Accepted Answer

The purpose of the statement of cash flows is to provide a cash-based view of a company, showing how its cash position has changed over a period of time. It outlines the sources and uses of cash, including operating activities, investing activities, and financing activities. This information is important for investors, lenders, and other stakeholders who want to understand a company's ability to generate and manage cash.

What Is the Purpose of the Statement of Cash Flows