Question

"A​ firm's statement of cash flows uses the balance sheet and the income statement to determine the amount of cash a firm has generated and how it has used that cash during a given period."
1. True
2. False

Answer 1

Answer:

The answer is true

Explanation:

It is true.

All the line items found in cash flow statement are found in the income statement and balance sheet.

For example:

Cash received from customers can be gotten from revenue(income statement) and accounts receivable(balance sheet)

Cash paid to customers can be gotten from purchases (income statement) and inventory (balance sheet)

Cash paid to employees can be found in salary and wages expenses.

Cash received from sale of equipment can be gotten from cost of equipment (balance sheet), gain on sale of equipment (income statement)