The primary purpose of the statement of cash flows is to
A) provide information about the investing and financing activities during a period.
B) prove that revenues exceed expenses if there is a net income.
C) provide information about the cash receipts and cash payments during a period.
D) facilitate banking relationships.

Question

Quizplus · Accepted Answer

The statement of cash flows is a financial statement that provides information about the cash receipts and cash payments of an organization during a specific period of time. It helps investors, creditors, and other stakeholders understand the sources and uses of the organization's cash, as well as its ability to generate future cash flows. The statement of cash flows is not used primarily to prove that revenues exceed expenses or to facilitate banking relationships, although these may be secondary benefits of the statement.

The Primary Purpose of the Statement of Cash Flows Is