Question

If you wanted to make sure a company has enough money available to pay its bills, which financial statement would be

most helpful?
A. Balance sheet
B. Income statement
C. Statement of owners' equity
D. Cash flow statement
Please select the best answer from the choices provided

Answer 1

D: Cash flow statement

Step-by-step explanation:

A financial statement known as a cash flow statement tracks and compilesto track and compile the amount of liquid assets (cash and cash equivalents) coming into and going out of a corporate entity.

The net amount of cash and cash equivalents moving into (received) and out (given) of a business is known as cash flow. The cash flow consists of three parts;

1. Operating cash flow is the total amount of money that a corporation generates from its operations.

2. Financing cash flow: all of an organization's payments and revenue from the sale of debt and equity.

3. Investing cash flow includes expenses related to capital asset purchases and cash resource investments in other firms.

Consequently, if you want to ensure that a business has adequate financial statements that would be most useful because it assesses how well the business is performing financially in terms of generating revenue to pay its debts and expenses.