One major purpose of the statement of cash flows is to provide information about:
A) the firm's profitability.
B) the firm's cash receipts and payments during a period.
C) the firm's resources and claims against those resources.
D) changes in retained earnings.

Question

Quizplus · Accepted Answer

The statement of cash flows provides information about the firm's cash receipts and payments during a period, including operating, investing, and financing activities. It shows how the company generated and used cash, which is important for assessing liquidity and understanding the firm's ability to meet its financial obligations. Profitability is addressed in the income statement, while resources and claims against those resources are covered in the balance sheet. Changes in retained earnings are reflected in the statement of retained earnings.

One Major Purpose of the Statement of Cash Flows Is