A basic objective of the statement of cash flows is to
A) Supplant the income statement and balance sheet
B) Disclose changes during the period in all asset and all liability accounts
C) Disclose the change in working capital during the period
D) Provide essential information for financial statements users in making economic decisions

Question

Quizplus · Accepted Answer

The basic objective of the statement of cash flows is to provide essential information for financial statements users in making economic decisions. It shows the inflows and outflows of cash during the period, allowing users to analyze the liquidity and cash flow position of the company. While it does disclose changes in certain asset and liability accounts, its primary purpose is not to supplant the income statement and balance sheet. It also does not solely focus on changes in working capital.

A Basic Objective of the Statement of Cash Flows Is