Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Separate disclosure of cash flow arising from Financial Activities is important because

Options:

It helps in identifying the investment activities

It helps in gaining in investing activities

It helps in making investing decision

It is useful in predicting claims on future cash flow by providers of funds to the enterprise

Correct Answer:

It is useful in predicting claims on future cash flow by providers of funds to the enterprise

Explanation:

The distinct presentation of cash flows related to financing activities holds significance because it aids in forecasting the future demands for cash by those who have invested in the enterprise, encompassing both equity holders and creditors.