Question

Which of the following financial statements
is prepared to analyse the reasons of
changes in balances of cash during
accounting year?​

Answer 1

Answer:

statement of cash flows

the statement of cash flows reports cash flows in three categories cash flows from business activities cash flows from investing activities and cash flows from financing activities.

Answer 2

ANSWER :

The financial statement that is prepared to analyse the reasons of changes in balances of cash during accounting year is Cash Flow Statement.

• Cash flow statement is the summary statement of a business's or a company's cash receipts and cash disbursements over a period of time.

• Cash flow statement explains the reason for the changes in cash position of the firm.

• Cash flow statement is a statement of movement of cash flows and it is an important tool of cash management.

• Cash flow statement is the financial tool that explains the cash flow of a company or a business by showing the the sources from which cash has been generated and how it has been spent during the accounting period.

• Cash flow statement is an analysis of all the changes that affect the cash account during an accounting period.

• Cash flow statement can be prepared in two ways : (a) Direct Method and (b) Indirect Method.