Which one of the following statements concerning accounting reports is correct?
A)The income statement reflects the position of a firm as of a single point in time.
B)The total equity of a firm is equal to the total assets plus the total liabilities.
C)The statement of cash flows identifies both the sources and the uses of cash.
D)The income statement reflects the amount of cash available for investment and financing activities.

Question

Quizplus · Accepted Answer

The statement of cash flows identifies both the sources (where cash comes from) and the uses (where cash goes) of cash, making option C the correct statement. Options A and D are incorrect, as the income statement reflects a firm's financial performance over a period of time and does not provide information on the position of a firm at a particular point in time, and it does not specifically indicate the amount of cash available for investment and financing activities. Option B is also incorrect as the total equity of a firm is equal to the total assets minus the total liabilities, not the sum of the two.

Which One of the Following Statements Concerning Accounting Reports Is