Which of the following statements accurately describes the statement of cash flows?
A) It shows the relative proportion of debt and assets.
B) It is the link between the accrual-based income statement and the cash reported on the balance sheet.
C) It indicates when long-term debt will mature.
D) It is the link between net income and earnings per share.

Question

Quizplus · Accepted Answer

The statement of cash flows explains how cash and cash equivalents have changed during a period, and it reconciles the cash reported on the balance sheet with the accrual-based net income reported on the income statement. It provides information about operating, investing, and financing activities that affect liquidity, not debt maturity or earnings per share.

Which of the Following Statements Accurately Describes the Statement of Cash