What financial statement explains the changes that took place in the firm's cash balance over a period?
A) statement of cash flow
B) balance sheet
C) income statement
D) reconciliation of free cash flow

Question

Quizplus · Accepted Answer

The statement of cash flow tracks the inflow and outflow of cash over a period, providing explanations for the changes in the firm's cash balance. The balance sheet only offers a snapshot of the company's assets, liabilities, and equity at a specific point in time. The income statement only shows the revenue and expenses generated during a given period. The reconciliation of free cash flow is an analysis tool that involves comparing different financial statements to determine the amount of cash generated or used by the firm.

What Financial Statement Explains the Changes That Took Place in the Firm's