Final answer:
A cash flow statement primarily assists in analyzing a client's spending habits over a certain period, as it reflects the cash inflows and outflows from various activities, but it does not offer a complete picture of tax liability, the timing of debt payments, or a snapshot of financial condition at a specific date.
Step-by-step explanation:
A cash flow statement is a financial document that outlines the flow of cash in and out of a business or an individual's finances over a specific period. It is a tool used to assess the liquidity and solvency of an entity, by showing the cash generated and used by operating, investing, and financing activities. When it comes to choosing the correct option for what a cash flow statement can be used to assess, the most fitting answer is (b) the client's spending habits.
The cash flow statement does not provide direct information about the current income tax situation (a) as it does not include calculations of tax liabilities. While it can offer some insights into whether debts have been paid (c), it does not show the exact timing of payments. Furthermore, it does not provide a snapshot of financial condition as of a specific date (d), which is the purpose of a balance sheet. Instead, it provides a comprehensive view of how funds have moved through an account, which can help analyze spending patterns and evaluate financial strategy.