The reasons for a decrease in cash can be determined by examining the statement of earnings.

Question

Quizplus · Accepted Answer

The statement of earnings (also known as income statement) shows the revenues and expenses of a company during a specific period, but it does not provide information about cash flows. In order to determine the reasons for a decrease in cash, it is necessary to analyze the statement of cash flows, which shows the inflows and outflows of cash during a period.

The Reasons for a Decrease in Cash Can Be Determined