Which of the following comments in relation to the statement of cash flow is incorrect? The statement of cash flows:
A) allows the user of the report to determine where cash has been generated.
B) is essentially a formal statement of all transactions affecting the cash account.
C) highlights where cash has been spent.
D) is a duplication of information already provided in the other financial statements.

Question

Quizplus · Accepted Answer

The statement of cash flows provides unique information on where cash has been generated and spent during the accounting period, which is not duplicated in the other financial statements. Therefore, choice D is incorrect. Choices A, B, and C are correct statements about the purpose of the statement of cash flows.

Which of the Following Comments in Relation to the Statement