What is true of Cash Flow statement?

It summarise the causes for the changes in cash position of a business enterprise between dates of two balance sheet

The correct answer is option 1- It summarise the causes for the changes in cash position of a business enterprise between dates of two balance sheet.

Cash Flow Analysis refers to the analysis of actual movement of cash into and out of an organisation. The flow of cash into the business is called as cash inflow or positive cash flow and the flow of cash out of the firm is called as cash outflow or a negative cash flow. The difference between the inflow and outflow of cash is the net cash flow. Cash flow statement is prepared to project the manner in which the cash has been received and has been utilised during an accounting year as it shows the sources of cash receipts and also the purposes for which payments are made. Thus, it summarises the causes for the changes in cash position of a business enterprise between dates of two balance sheets.