Ideally, the purpose of statement cash flows is to provide relevant information about the cash receipts as well cash payments of an enterprise during a period. Normally it differs from the balance sheet as well the income statement in the sense that it reports the sources and uses of cash by operating, investing as well financing activity classification. While the income statement and the balance sheet are accrual basis statements, the statement of cash basis statement non cash items are omitted.
Work Step by Step
Additionally, the purpose of the statement of cash flows is to provide informative information regarding cash receipts, cash payments, as well the net change in cash resulting from the period under analysis.