National Co. reported a net loss of $30,000 for 2012, yet its cash balance increased during the year. Which financial statement should National's management refer to for an explanation of this situation?
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 shows the sources and uses of cash during a period, which will help explain why the cash balance increased despite a net loss being reported on the income statement.