The Purpose of the Statement of Cash Flows Is to Show

question 66

Multiple Choice

The purpose of the Statement of Cash Flows is to show:

• A)the revenue earned.
• B)the profits that were earned.
• C)the expenses that were paid.
• D)how cash was received and used during the period.

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Definitions:

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, principles, and procedures used in the compilation of financial statements to ensure accuracy and fairness.

Interim Reporting

Financial statements prepared and published at intervals less than a fiscal year, typically quarterly or semi-annually, to provide updates on a company's performance.

Accounting Principles

The rules and guidelines that companies follow when preparing financial statements, ensuring accuracy, consistency, and transparency.

Interim Reporting

The financial reporting on a company's activities during a portion of the fiscal year, such as quarterly or semi-annual reports.