Question

Q. Which of the following statements best shows the amount of debt repayment by a company during the year?

Answer 1

Answer:

The cash flow statement (CFS) best shows the amount of debt repayment by a company during the year.

Explanation:

What is meant by a cash flow statement?

• A cash flow statement is a type of financial statement that gives total information about all of the cash inflows a business makes from continuing activities and outside investment sources. It also includes any cash outflows made within a specific time period to cover investments and business expenses.
• By monitoring an organization's cash flow, a cash flow statement is a crucial tool for managing finances. This report is one of the three crucial ones that determine a company's performance, together with the income statement and the balance sheet.
• The total amount of funds received by an organisation from operations, investments, and financing activities is shown on the cash flow statement of the corporation.

Thus, the main goal of a cash flow statement is to give valuable details about an enterprise's cash flows within a specific time period under multiple headings.

To know the purpose of the cash flow statement, click on the below link

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To know the heading in the statement of cash flow, click on the below link

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