The Statement of Cash Flows:
A)Lists all cash flows over the life of a company.
B)Breaks down all cash transactions into investing and financing cash flows.
C)Shows that the change in total cash from one year to the next is equal to the net operating,investing,and financing cash flows.

Question

Quizplus · Accepted Answer

The Statement of Cash Flows is designed to show how changes in balance sheet accounts and income affect cash and cash equivalents, breaking these effects into three main categories: operating, investing, and financing activities. It reconciles the starting and ending cash and cash equivalents by showing the net cash flow from each of these categories, thus demonstrating that the change in total cash from one year to the next is equal to the net of these three types of cash flows.