The net increase (or decrease) in cash that is reported on the statement of cash flows should be the same as the change in the balance of the cash account for the two most recent years on the comparative statements of financial position.

Question

Quizplus · Accepted Answer

The statement of cash flows summarizes the cash inflows and outflows for a specific period of time and calculates the net change in cash during that period. This net change should match the difference in the cash account balances on the two comparative statements of financial position for the same period. Therefore, the net increase (or decrease) in cash reported on the statement of cash flows should be the same as the change in the cash account balance on the comparative statements of financial position.

The Net Increase (Or Decrease) in Cash That Is Reported