The statement of cash flows is designed to fulfill all of the following purposes EXCEPT to:
A)assess the collectability of accounts receivable.
B)show the relationship of net income to changes in the company's cash.
C)help predict future cash flows.
D)evaluate management decisions.

Question

Quizplus · Accepted Answer

While the statement of cash flows can provide information on the changes in accounts receivable, its primary purpose is to provide information on the company's cash inflows and outflows. The other purposes listed, including showing the relationship between net income and cash, predicting future cash flows, and evaluating management decisions, are all core functions of the statement of cash flows.

The Statement of Cash Flows Is Designed to Fulfill All