A cash flow statement is considered a major financial statement for a business and nonprofit entity. Discuss the main purposes of a cash flow statement and how an entity uses the cash flow statement. Discuss the major sections of a cash flow statement and identify which types of transactions are contained in each section.
A cash flow statement is considered a major financial statement for a business and nonprofit entity. Discuss the main purposes of a cash flow statement and how an entity uses the cash flow statement. Discuss the major sections of a cash flow statement and identify which types of transactions are contained in each section.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A cash flow statement is considered a major financial statement for a business and nonprofit entity.
Discuss the main purposes of a cash flow statement and how an entity uses the cash flow statement.
Discuss the major sections of a cash flow statement and identify which types of transactions are contained in each section.
Expert Solution
Step 1
For any type of organisation, cash flow activity is compulsory, it is a part of the financial statements.
it does not depend on whether it is a profit or non profit oriented business
cash flow statement is prepared whether cash generated and cash spent shown on periodic basis.
cash flow statement is important to analyse the liquidity of the organisation
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