Which of the following statements present financial information based on the cash basis of accounting?
A) Balance Sheet
B) Income Statement
C) Statement of Retained Earnings
D) Statement of Cash Flows

Question

Quizplus · Accepted Answer

The statement of cash flows presents financial information based on the cash basis of accounting as it shows cash inflows and outflows during a specific period of time. The other options (balance sheet, income statement, and statement of retained earnings) are prepared on the accrual basis of accounting, which recognizes transactions when they occur, regardless of whether cash has been exchanged.

Which of the Following Statements Present Financial Information Based on the Cash