Question

The Importance of the Statement of Cash Flows in the area of accountability for cash within an entity

Answer 1

Ans:

Cashflow deficit the actual utilisation of cash and the cash position of the company. It further provides a light on the liquidity position of the entity and the manner of its utilisaton . It also indicate where the organisation cash resources are beinga ctually utilised and from where it has major inflow of resources . So the user of financials have a clear indication of the liability of the company and its performance as the profit & loss statement many items inflated by non cash items so doesnt reflect the correct liwuidity of the entity.