The primary purpose of the statement of cash flows is to provide information
A) about the operating, investing, and financing activities of an entity during a period.
B) that is useful in assessing future cash flow prospects.
C) about the cash receipts and cash payments of an entity during a period.
D) about the entity's ability to meet its obligations and to pay dividends.

Question

Quizplus · Accepted Answer

The statement of cash flows provides information about the cash receipts and cash payments of an entity during a period, including operating, investing, and financing activities. While it may indirectly provide some insight into an entity's ability to meet its obligations and pay dividends, this is not its primary purpose. It also may provide some information about future cash flow prospects, but again, this is not its primary purpose.

The Primary Purpose of the Statement of Cash Flows Is