The statement of cash flows and related disclosures would be of the least assistance in helping a potential investor assess
A) a firm's ability to generate cash.
B) a firm's ability to meet its obligations.
C) a firm's ability to make good use of cash reserves to earn interest or other return.
D) the reasons for differences between income and associated cash flows.

Question

Quizplus · Accepted Answer

While the statement of cash flows can provide information about a firm's ability to generate cash and meet its obligations, it does not give any direct information about a firm's ability to make good use of cash reserves to earn interest or other return. This information would typically be found in the firm's notes to the financial statements or other disclosures. Therefore, option C is of the least assistance in helping a potential investor assess a firm's investment potential.

The Statement of Cash Flows and Related Disclosures Would Be