The basis of measurement used in the Statement of Cash Flows is:
A) accrual
B) cash and cash equivalents
C) net present value
D) market value.

Question

Quizplus · Accepted Answer

The Statement of Cash Flows measures the inflows and outflows of cash and cash equivalents during a specific period, making the basis of measurement cash and cash equivalents. This statement focuses on the liquidity of a company rather than its profitability or net worth, making cash and cash equivalents the most appropriate basis of measurement. Therefore, choice B is the best answer.

The Basis of Measurement Used in the Statement of Cash