Preparation of the statement of cash flows does not involve:
A)Computing the net increase or decrease in cash.
B)Computing and reporting net cash provided or used by operations.
C)Computing the profit compared to the net increase or decrease in cash.
D)Computing and reporting net cash provided or used by financing activities.
E)Computing and reporting net cash provided or used by investing activities.

Question

Quizplus · Accepted Answer

The preparation of the statement of cash flows involves computing the net increase or decrease in cash, computing and reporting net cash provided or used by operations, computing and reporting net cash provided or used by financing activities, and computing and reporting net cash provided or used by investing activities. However, it does not involve computing the profit compared to the net increase or decrease in cash. The statement of cash flows focuses specifically on the movement of cash, rather than the profitability of the business.

Preparation of the Statement of Cash Flows Does Not Involve