The statement of cash flows:
A)compares costs and expenses against firm's net profits.
B)is built on the basic accounting equation: Assets = Liabilities + Capital.
C)shows what assets the business owns and what claims creditors and owners have against those assets.
D)shows changes in working capital by listing sources and uses of funds.

Question

Quizplus · Accepted Answer

The statement of cash flows shows changes in working capital by listing sources and uses of funds. It records the cash inflows and outflows of the company during a particular accounting period and helps in understanding the changes in cash and cash equivalents. Options A, B, and C are not correct as they refer to different financial statements - income statement, balance sheet, and statement of changes in equity.

The Statement of Cash Flows