A statement of cash flows explains the differences between the beginning and ending balances of:
A)Net income.
B)Equity.
C)Cash and cash equivalents.
D)Working capital.
E)Cash and short-term investments.

Question

Quizplus · Accepted Answer

A statement of cash flows is a summary of the inflows and outflows of cash and cash equivalents over a certain period of time. It explains the differences between the beginning and ending balances of cash and cash equivalents, which is why choice C is the best answer. The other options are not directly related to the statement of cash flows.

A Statement of Cash Flows Explains the Differences Between the Beginning