The statement of cash flows is prepared on a cash basis rather than an accrual basis.

Name: The statement of cash flows is prepared on a cash basis rather than an accrual basis.
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Question

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The statement of cash flows is prepared on a cash basis, focusing on cash inflows and outflows, unlike other financial statements that are prepared on an accrual basis, recognizing revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.

The Statement of Cash Flows Is Prepared on a Cash