The statement of cash flows reports the effects of a firm's operating, investing, and financing activities on cash flows.Information in the statement helps in understanding which of the following concept(s)?
A)The effect of operations on the liquidity of a firm.
B)The level of capital expenditures needed to support ongoing and growing levels of activity.
C)The major changes in the financing of a firm.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The statement of cash flows provides information on the effects of a firm's operating, investing, and financing activities on cash flows. Therefore, it can help in understanding the effect of operations on the liquidity of a firm (A), the level of capital expenditures needed (B), and major changes in financing (C), making option D the correct answer. Option E is incorrect as the statement of cash flows does provide valuable information for understanding a firm's financial situation.

The Statement of Cash Flows Reports the Effects of a Firm's