One of the purposes of the statement of cash flows is to​ ________.

Question

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Part 1
A.
determine the retained earnings of the business
B.
evaluate the level of debt and leverage of a company
C.
determine the net income for the period
D.
evaluate management and their investment decisions

Answer 1

One of the purposes of the statement of cash flows is to​ D. evaluate management and their investment decisions.

The statement of cash flows provides insights into a company's cash inflows and outflows from operating, investing, and financing activities, helping stakeholders assess how well the company generates cash and manages its cash resources, which are crucial for effective decision-making.