Final answer:
The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.
Step-by-step explanation:
The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period. This statement is divided into three sections: operating activities, investing activities, and financing activities.
In the operating activities section, it shows the cash flows related to the company's core operations, such as revenue from sales, payment for expenses, and changes in working capital.
In the investing activities section, it shows the cash flows related to the company's investments, such as the purchase or sale of long-term assets or investments in other companies.
In the financing activities section, it shows the cash flows related to the company's financing, such as borrowing or repaying loans, issuing or repurchasing shares, and paying dividends to shareholders.