The end goal of preparing the statement of cash flows is to show what caused the change in cash from the beginning of the period to the end of the period.

Question

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The purpose of the statement of cash flows is to explain the reasons for the change in cash balance over a specific period, whether it is an increase or decrease. It reconciles the beginning and ending balances of cash and cash equivalents by showing the sources and uses of cash during the period.

The End Goal of Preparing the Statement of Cash Flows