a.?The other required financial statements in addition to the income statement and balance sheet are the statement of cash flows and statement of changes in owners’ equity (or the statement of retained earnings).  The statement of cash flows discloses the reporting entity’s cash provided (or used) by operating, investing, and financing activities.  This statement provides relevant information about the cash receipts and cash payments, and shows why the Cash position on the balance sheet changed from the beginning to the end of the period.  The statement of changes in owners’ equity explains the changes during the period in the major elements of owners’ equity such as common stock, preferred stock, additional paid-in capital, and retained earnings, including the impact of net income and dividends.

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