The purpose of the cash flow statement is to:
1) Show where the business's cash has come from and where it has been spent
2) To give a detailed breakdown of key items shown in the primary financial statements
3) Show, at a particular date, the sources of funds provided to a business by shareholders and others and how these funds have been used
4) Show the revenues, expenses and operating profit for the financial year
Answers
because it is written in 1 st statement
Answer:
The purpose of the cash flow statement is to: Show where the business's cash has come from and where it has been spent.
Explanation:
A Cash Flow Statement (also known as the Statement of Cash Flows) shows how much cash is generated and used during that particular given period of time. It is one of the main financial statements analysis used in building a three-statement model. The three main categories found in a cash flow statement are (1) operating activities, (2) investing activities, and (3) financing activities.
A cash flow statement is the most important financial statement of the organisation, which is prepared with the purpose of showing how much cash is available with the organisation at a specific period of time by taking into consideration the opening balance of the cash at the beginning of the year along with the other cash transactions to arrive at the closing cash balance of the organisation at the end of the year.
Following are the purpose of the cash flow statement-
- It helps to calculate the entity's cash balance.
- It helps to check the organisation's liquidity.
- It helps to determine future predictions.
- It helps to find out the cash balances from different activities
- It helps to fulfil the organisation’s legal requirements.
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