The purpose of a cash flow statement is to
A) show the profits generated.
B) show how cash was generated and used during a period.
C) show the expenses incurred in doing business.
D) show the revenue earned.

Question

Quizplus · Accepted Answer

The purpose of a cash flow statement is to show how cash was generated and used during a period. It tracks the inflows and outflows of cash in order to provide insights into the liquidity and solvency of a business. The cash flow statement is an important tool for understanding a company's financial health since it shows whether or not it has enough cash on hand to pay its bills and fund its operations.

The Purpose of a Cash Flow Statement Is to