The cash flow statement must include a note reconciling:
A) profit and cash flow from operations.
B) accrual accounting and historical cost accounting.
C) the business bank balance with the bank statement balance.
D) opening equity with closing equity.

Question

Quizplus · Accepted Answer

The cash flow statement helps to explain the difference between profit and cash flow from operations. This is often needed because profit and cash flows from operating activities are not necessarily the same, due to non-cash items such as depreciation and changes in working capital. The reconciliation note helps to explain these differences.

The Cash Flow Statement Must Include a Note Reconciling