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21.The purpose of a statement of cash flows is to provide relevant information about the cash receiptsand cash payments of an enterprise during a period. It differs from the balance sheet and theincome statement in that it reports the sources and uses of cash by operating, investing, andfinancing activity classifications. While the income statement and the balance sheet are accrualbasis statements, the statement of cash flows is a cash basis statement—noncash items areomitted.22.The difference between these two amounts may be due to increases in current assets (e.g., anincrease in accounts receivable from a sale on account would result in an increase in revenue andnet income but have no effect yet on cash). Similarly a cash payment that results in a decrease inan existing current liability (e.g., accounts payable would decrease cash provided by operationswithout affecting net income).