Cash Flows from Operations – True or False

Practice Question

Intro to Financial Accounting
Statement of Cash Flows
Cash Flows from Operations
True or False

The statement of cash flows provides information on a company's cash inflows and outflows.

Answer +
Correct Answer: TRUE
Explanation +

The statement of cash flows provides detailed insights into how a company generates and uses cash across operating, investing, and financing activities.

This report helps investors and stakeholders evaluate the liquidity, solvency, and overall financial health of the business by focusing on actual cash movements rather than accrual-based income.