The main purpose of the Statement of Cash Flows is:
A) to determine the change in cash for the period.
B) to disclose information about cash receipts and disbursements during the period.
C) to disclose the changes in long-term asset and liability accounts during the period.
D) to disclose significant noncash investing and financing activities during the period.
E) to explain why net income and net operating cash flows are different.

Question

Quizplus · Accepted Answer

The main purpose of the Statement of Cash Flows is to disclose information about cash receipts and disbursements during the period. It provides a summary of the cash inflows and outflows from operating, investing, and financing activities, showing the change in cash and cash equivalents for the period. It helps users of financial statements to evaluate the company's liquidity, solvency, and financial flexibility. The other choices are not the primary purpose of the Statement of Cash Flows.

The Main Purpose of the Statement of Cash Flows Is