The statement of cash flows cannot help address questions such as:
A) Why is cash flow from operations different from income?
B) What is the source of cash for new plant assets?
C) How much of the company's revenues have been retained as profit?
D) How much cash is generated from or used in operations?
E) How is the increase in investments financed?

Question

Quizplus · Accepted Answer

The statement of cash flows provides information on the cash inflows and outflows of a company during a specific period. It shows how the company generated and used cash, but it does not provide information on how much of the company's revenues have been retained as profit, which is related to the income statement. The statement of cash flows can answer questions related to cash flow from operations, sources of cash for new plant assets, cash generated from or used in operations, and how the increase in investments is financed.

The Statement of Cash Flows Cannot Help Address Questions Such