Which of the following statements is CORRECT?
A) The statement of cash flows shows how much the firm's cash⎯the total of currency, bank deposits, and short-term liquid securities (or cash equivalents)⎯increased or decreased during a given year.
B) The statement of cash flows reflects cash flows from operations, but it does not reflect the effects of buying or selling fixed assets.
C) The statement of cash flows shows where the firm's cash is located; indeed, it provides a listing of all banks and brokerage houses where cash is on deposit.
D) The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in working capital.
E) The statement of cash flows reflects cash flows from operations and from borrowings, but it does not reflect cash obtained by selling new common stock.

Question

Quizplus · Accepted Answer

The statement of cash flows shows the changes in a firm's cash and cash equivalents during a period, including cash flows from operating, investing, and financing activities. Therefore, statement A is the only correct statement among the choices given.

Which of the Following Statements Is CORRECT