Question

The definition of cash as used in Cash Flow Statements includes.

(A) Only cash balances.

(B) Only bank balances.

(C) Bank balances and bank overdrafts.

(D) Cash in hand plus bank balances less bank overdrafts.​

Answer 1

Answer:

cash flow statement is a financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources. It also includes all cash outflows that pay for business activities and investments during a given period.

Answer 2

Answer:

Benefits of Cash Flow Statement

Cash flow statement provides the following benefits :

 A cash flow statement when used along with other financial statements

provides information that enables users to evaluate changes in net assets

of an enterprise, its financial structure (including its liquidity and

solvency) and its ability to affect the amounts and timings of cash flows

in order to adapt to changing circumstances and opportunities.

 Cash flow information is useful in assessing the ability of the enterprise

to generate cash and cash equivalents and enables users to develop

models to assess and compare the present value of the future cash

flows of different enterprises.

 It also enhances the comparability of the reporting of operating

performance by different enterprises because it eliminates the effects of

using different accounting treatments for the same transactions and

events.

 It also helps in balancing its cash inflow and cash outflow, keeping in

response to changing condition. It is also helpful in checking the

accuracy of past assessments of future cash flows and in examining

the relationship between profitability and net cash flow and impact of

changing prices.

2020-21