Exam 8: Reporting Financial Information: a Closer Look at the Financial Statements

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Why do organizations prepare cash flow statements and operating statements?

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Operating statements show an organization's profitability but not its sources and uses of cash. Both are needed because the operating statement is prepared on the accrual basis.

The cash flow statement is divided into what three sections?

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Cash flows from operating activities, cash flows from investing activities, cash flows from financing activities.

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