Question

The primary purpose of the statement of cash flows is to Select one: a. facilitate banking relationships. b. provide information about the investing and financing activities during a period. c. provide information about the cash receipts and cash payments during a period. d. prove that revenues exceed expenses if there is a net income.

Answer 1

Answer:

C) Provide information about the cash receipts and cash payments during a period.

Explanation:

Cash flow statement is a financial statement that displays the effect of changes accounted in the statement of financial position on cash and cash equivalents. Cash flow statements involve how cash moved into and out of a business. Cash flow statements are used to determine businesses' ability to foot bills.

One primary purpose of a cash flow statement is cash flows is to provide information on cash receipts and cash payments from the operating and investing activities of a company during this period.

Answer 2

Answer:

c. provide information about the cash receipts and cash payments during a period.

Explanation:

The purpose of statement of cash flows is to report all major cash receipts ( inflows) and cash payments ( outflows) during a period. This includes separately identifying the cash flows relating to operating , investing and financing activities .

The statement of cash flows does more  than simply report changes in cash.The statement of cash flows addresses important questions such as how does a company obtain its cash or spend its cash, or explains changes in cash by summarizing, classifying and  reporting a company's cash inflows and cash outflows for each period.

So Option C is the best choice