The statement of cash flows shows the effect on the firm's cash flows of earnings and changes in the assets,current liabilities,long-term liabilities and net worth.

Question

Quizplus · Accepted Answer

The statement of cash flows provides information about the inflows and outflows of cash from operating, investing, and financing activities. It shows how the changes in the balance sheet accounts have affected the company's cash position. It is an important financial statement for understanding a company's ability to generate cash, its liquidity, and its financial health. Therefore, the statement of cash flows does show the effect on the firm's cash flows of earnings and changes in the assets, current liabilities, long-term liabilities, and net worth.

The Statement of Cash Flows Shows the Effect on the Firm's