Topic 5 Statement of Cash Flows

Question 1

Statement of Cash Flows

Answer 1

summarizes a company’s cash flows for a period of time.

Question 2

Pro forma

Answer 2

a prediction of what actual cash flow statement will look like in future years if the operating, investing, and financing plans are implemented.

Question 3

Purpose of the Statement of Cash Flows

Answer 3

• highlights changes in managerial strategy regarding investments and finances
• provides information about an entity’s cash receipts and payments over a period of time-
  provides investors with information about the investing and financing activities of an entity.