The statement of cash flows must include a note reconciling:
A)profit and cash flow from operations.
B)the business bank balance with the bank statement balance.
C)accrual accounting and historical cost accounting.
D)opening equity with closing equity.

Question

Quizplus · Accepted Answer

The statement of cash flows is a financial statement that reports a company's cash inflows and outflows during a period. It explains the changes in the cash and cash equivalents account from the beginning of the period to the end of the period. It reconciles net income (which is calculated using accrual accounting basis) with the actual cash inflows and outflows of the business. Therefore, option A, reconciling profit and cash flow from operations, is the best choice.

The Statement of Cash Flows Must Include a Note Reconciling