Research is supportive of the contention that cash and funds flow data are informative above and beyond accrual data.

Question

Quizplus · Accepted Answer

Studies have shown that cash and funds flow data provide valuable information about a company's financial health, liquidity, and sustainability that may not be captured by accrual data alone. This is because accrual accounting can involve estimates and assumptions that do not always reflect the actual cash movements within a business. Cash and funds flow data can provide a more accurate picture of a company's ability to meet its obligations, generate profits, and invest in growth.

Research Is Supportive of the Contention That Cash and Funds