Which of the following statement is incorrect about cash flow stateme…

The correct answer is option 4- None of the above.

All the above statement about cash flow are true. So, correct ans is none of the above.

It provides information about cash inflows and cash outflows: This is the primary purpose of a cash flow statement to track the movement of cash and cash equivalents into and out of a company.

It provides information of flows of cash under three major categories: The cash flow statement typically classifies cash flows into three main activities:

• Operating activities: Cash flow from the normal day-to-day running of the business.
• Investing activities: Cash flow related to the purchase and sale of long-term assets and investments.
• Financing activities: Cash flow related to how the company is funded (e.g., debt, equity).

It helps in preparing cash budget: By providing a historical overview of cash inflows and outflows, the cash flow statement is a valuable tool for forecasting future cash flows and preparing a cash budget.