What does the Cash Flow (CF) report show?

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Multiple Choice

What does the Cash Flow (CF) report show?

Cash Flow shows actual cash movements—money coming in and going out—over a period. It categorizes these movements into operating activities, investing activities, and financing activities, and shows how they affect the cash balance and, consequently, the client’s assets. Net income sits on the income statement, not the cash flow report, and the cash flow statement includes both inflows and outflows, not just one direction. Tax liabilities are tracked elsewhere and don’t define what the cash flow report measures. So, inflows and outflows and their impact on assets is exactly what this report conveys.

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