Answer:
A. The statement of cash flows
Explanation:
The statement of cash flows is the one of the financial statements prepared by entities to demonstrate the inflow and outflow of cash in an organisation during an accounting period, usually one year.
This statement is divided into three sections as specified by relevant accounting standards. The sections are operating, investing and financing.
Each section contains activities peculiar to the section`s name.
In the operating section, for example,activities that are peculiar to entity`s operation in form of revenue received from customers, cash paid to supplier, tax paid to government are grouped under this section. Investing section contains activities involving entity`s purchase of assets, investment in securities and cash generated from disposal of assets and other relevant activities. Under financing section, cash activities relating to divided paid to shareholders, cash generated from issuance of shares and other relevant activities are recorded here. At the end, the balance under each section is net off against opening cash balance in the period to get closing cash balance for the year.
The other options-income statement, the balance sheet and the retained earnings statement- are not divided into operating, investing and financing activities. So the statement of cash flows is the correct option.
