Which financial statement reports the sources and uses of cash by a business?

Which financial statement reports the sources and uses of cash by a business?

• A. Balance Sheet
• B. Statement of Equity
• C. Statement of Cash Flows
• D. Income Statement

Answer: (C)

Tracking cash movements starts with the statement that reports cash receipts and payments. It breaks cash flows into operating activities, investing activities, and financing activities, so you can see where cash comes from and how it’s spent during the period. It also ties to the cash balance by reconciling the starting cash to the ending cash on the balance sheet. Other statements describe different things: assets and liabilities on a given date (balance sheet), performance over the period through revenues and expenses (income statement), and changes in owners’ equity (statement of equity). Since the question asks for a statement that shows how cash is generated and used, the cash flow statement is the one that provides that.

Tracking cash movements starts with the statement that reports cash receipts and payments. It breaks cash flows into operating activities, investing activities, and financing activities, so you can see where cash comes from and how it’s spent during the period. It also ties to the cash balance by reconciling the starting cash to the ending cash on the balance sheet. Other statements describe different things: assets and liabilities on a given date (balance sheet), performance over the period through revenues and expenses (income statement), and changes in owners’ equity (statement of equity). Since the question asks for a statement that shows how cash is generated and used, the cash flow statement is the one that provides that.