With respect to the statement of cash flows:
A)increasing assets is always the predominant use of cash while borrowing is the predominant source of cash.
B)increases in assets are sources of cash and increases in liabilities are uses.
C)its most important function is to identify the principal sources and uses of cash.
D)All of the above

Question

Quizplus · Accepted Answer

Option A is incorrect as increasing assets may be a source or use of cash depending on the nature of the asset. Option B is incorrect as increases in liabilities may also be a source or use of cash depending on the reason for the increase. Option C is correct, as the primary purpose of the statement of cash flows is to identify the sources and uses of cash during a given period.

With Respect to the Statement of Cash Flows