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A statement of cash flows helps answer all of the following:

1. What explains the changes in the cash account?
2. Where does a company spends its cash?
3. How can the company improve its operations?
4. How does a company receives its cash?
5. What are the changes in the non-cash accounts?

User Pritaeas
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Answer:

1. What explains the changes in the cash account?

2. Where does a company spends its cash?

4. How does a company receives its cash?

Step-by-step explanation:

The Cashflow statement deals with the cash transactions of the company with a view to know how actual cash moves through the company. As a result, it can answer questions related to the cash transactions of the company.

This includes:

  • Why there were changes in the cash account because it shows what activities brought in cash and which took cash.
  • Where the company spends its cash because those entries will be shown.
  • Where the company gets its cash as well.
User Abhishek Patel
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