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31. Why is the statement of cash flows necessary? Because investors and managers wanted information on...

31. Why is the statement of cash flows necessary?

Because investors and managers wanted information on how much cash went up or down in a period

Because investors and managers needed information on the net profit of a period

Because investors and managers wanted additional information on why cash went up or down in a period

Because the income statement is constructed using cash-basis accounting
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Answer #1

The statement of cash flows is necessary because:

- Because investors and managers wanted additional information on why cash went up or down in a period.

A cash flow statement tells you where the money went. It divides the source and application of money into three activities namely - i) Cash flow from operating activities, ii) Cash flow from Investing activities and iii) Cash flow from financing activities.

Thus its become easier where the money is going and coming from.

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