Why Is the Statement of Cash Flows Important

question 29

Multiple Choice

Why is the statement of cash flows important?

• A)of the three required financial statements,it is the only one which reports changes which took place during an accounting period.
• B)it indicates the asset and liability position of a company by reflecting the amounts and types of its assets and liabilities at the beginning and end of the period.
• C)it summarizes the information already reported in the income statement and statement of financial position.
• D)it explains the sources and uses of cash during the period.

---

Definitions:

Judicial Precedent

A principle or rule established in a previous legal case that is binding or persuasive for a court when deciding subsequent cases with similar issues or facts.

Customs

The official department that administers and collects the duties levied by a government on imported goods, as well as the traditions and accepted practices within a society.

National Industrial Recovery Act

A law passed in 1933 as part of the U.S. New Deal to stimulate economic recovery, establish fair competition, and reduce unemployment.

Unconstitutional

An action or legislative act that is deemed to be in violation of the constitution of a country.