Question

Cash flow statement is also known as _____________.

• A. Statement of changes in financial position on cash basis
• B. Statement accounting for variation in cash
• C. Both (A) and (B)
• D. None of the above

Answer 1

Answer: (C)

Both (A) and (B)

Statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Cash flow statement is a statement showing the inflow and outflow of the cash of a company classified in 3 categories of activities:

1. Operating cash flows

2.Investing cash flows

3.Financing cash flows

It involves movement of the cash in the company from these 3 categories of activities. Therefore, It is a statement depicting changes in cash position from one period to another.