Question

Which of the following statements is CORRECT?

a. The statement of cash flows reflects cash flows from operations and from borrowings, but it does not reflect cash obtained by selling new common stock.
b. The statement of cash flows reflects cash flows from operations, but it does not reflect the effects of buying or selling fixed assets.
c. The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in working capital.
d. The statement of cash flows shows how much the firm's cash, the total of currency, bank deposits, and short-term liquid securities (or cash equivalents), increased or decreased during a given year.
e. The statement of cash flows shows where the firm's cash is located; indeed, it provides a listing of all banks and brokerage houses where cash is on deposit.

Answer 1

d. The statement of cash flows shows how much the firm's cash, the total of currency, bank deposits, and short-term liquid securities (or cash equivalents), increased or decreased during a given year.

Step-by-step explanation:

In a statement of cash flows , what we have shown is a summary of cash and also all equivalents if cash that goes into and also goes out if a firm or company. It provides to what extent that cash is being managed by a firm. Therefore option D is the answer to this question since it talks about how cash increases or decreases in a firm in a particular year