A statement of cash flows is not intended to assist investors in evaluating:
A)Reasons for differences between the amount of net income and net cash flow from operations.
B)The company's ability to meet its obligations and to pay dividends.
C)Non-cash aspects of investing and financing activities.
D)The profitability of business operations.

Question

Quizplus · Accepted Answer

The statement of cash flows focuses on the cash flows of a company, rather than its profitability. While profitability can indirectly impact cash flows, the statement of cash flows is not intended to directly evaluate the profitability of a company's business operations.

A Statement of Cash Flows Is Not Intended to Assist