Which of the following are limitations of a statement of cash flows?
I. Only past cash flows are reported
II. Cash flows can be manipulated,e.g. postponing expenditures
III. Non-cash transactions can be significant in affecting future investing and financing cash flows

Question

Quizplus · Accepted Answer

I, II, and III are all limitations of a statement of cash flows. It only reports past cash flows, not predicting future ones. Cash flows can indeed be manipulated by timing certain transactions. Non-cash transactions, while not appearing in the cash flow statement, can significantly impact a company's financial health and future cash flows.

Which of the Following Are Limitations of a Statement of Cash