Question

What is the primary objective of cash flow statement?

Options

• To provide useful information about cash flows (inflows and outflows) of an enterprise.

• A cash flow statement when used along with other financial statements provides information that enables users to evaluate changes in net assets of an enterprise.

• Historical cash flow information is often used as an indicator of the amount, timing and certainty of future cash flows.

• None of these.

Answer 1

To provide useful information about cash flows (inflows and outflows) of an enterprise.

Explanation:

A cash flow statement depicts the influx and outflow of cash and cash equivalents from a company's various activities over a given time period. The main goal of a cash flow statement is to offer meaningful information about an enterprise's cash flows (inflows and outflows) over time under several headings, such as operating activities, investing activities, and financing activities.