Question

The major activities of a firm shown on the statements of cash flows include:

a) Revenue and expenses
b) Assets and liabilities
c) Cash inflows and outflows
d) Profit and loss

Answer 1

The major activities of a firm shown on the statements of cash flows include cash inflows and outflows that track the movement of cash into and out of a company.

Step-by-step explanation:

The major activities of a firm shown on the statements of cash flows include: Cash inflows and outflows. These statements track the movement of cash into and out of a company during a specific period of time. It helps to determine the sources and uses of cash, including cash received from customers, cash paid to suppliers and employees, and cash invested in or returned from investments.

For example, a company may have cash inflows from sales revenue and cash outflows from expenses such as salaries, rent, and purchasing supplies. These cash flows are separate from profits and losses, which are reported on the income statement.

Overall, the statements of cash flows provide valuable information about a company's liquidity and ability to generate cash.