The purpose of the statement of cash flows is to report the major items comprising cash receipts and cash payments during a period.

Question

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The statement of cash flows provides information about the cash inflows and outflows of an organization over a given period of time, which helps users understand the organization's liquidity, financial flexibility, and ability to fund its operations and growth. It reports the major categories of cash receipts (such as sales revenue, investment income, and borrowing) and cash payments (such as purchases, operating expenses, and debt payments) to help users assess the sources and uses of cash.

The Purpose of the Statement of Cash Flows Is to Report