Which statement is correct?
A)Managers are more interested in the net income than the cash generated by the company
B)Under GAAP,only the income statement is required by investors,creditors and managers.
C)All companies must have a treasury department to manage their cash resources.
D)The cash flow statement shows the capacity of the company to sustain its operations.

Question

Quizplus · Accepted Answer

The cash flow statement shows the inflows and outflows of cash from operating, investing, and financing activities, which helps to determine the cash-generating capacity of the company and its ability to sustain operations. Managers, investors, and creditors are all interested in the cash generated by the company, as it reflects its financial health and stability. While some companies may choose to have a separate treasury department to manage their cash resources, it is not a mandatory requirement for all businesses. GAAP requires companies to prepare both the income statement and balance sheet, along with the cash flow statement.

Which Statement Is Correct