The statement of cash flows provides information about
A)the cumulative effects of operations over several years.
B)the balances in shareholders' equity accounts.
C)the relationship between operations and liquidity of a firm.
D)the success of management's cash management strategy.
E)all of the above.

Question

Quizplus · Accepted Answer

The statement of cash flows shows the relationship between operations and liquidity by reporting the cash inflows and outflows of a firm from operating, investing, and financing activities during a specific period. It does not provide information about cumulative effects of operations over several years or balances in shareholders' equity accounts. While the statement of cash flows may indicate the success of management's cash management strategy, this is not its primary purpose.

The Statement of Cash Flows Provides Information About