Which one of the following is a principal function of the statement of cash flows?
A) To predict future net income
B) To evaluate management decisions
C) To evaluate the company's earnings per share
D) To predict the growth of company assets

Question

Quizplus · Accepted Answer

The principal function of the statement of cash flows is to evaluate management decisions by showing the inflows and outflows of cash over a specific period of time. It helps stakeholders understand how the company is generating and using its cash resources. It does not predict future net income, evaluate earnings per share, or predict the growth of company assets.

Which One of the Following Is a Principal Function of the Statement