SIE Exam Question 120: Answer and Explanation

Question: 120

Which financial statement provides a summary of the firm's cash flow and other events that caused changes in the cash position?

• A. Income statement
• B. Balance sheet
• C. Cash flow statement
• D. Annual report

Correct Answer: C

Explanation:

The cash flow statement provides a summary of a company's cash flow and other events that caused changes in their cash position. The income statement reports a company's revenue over a specified time period, along with the expenses the company incurred to generate that revenue. The balance sheet is a summary report of a company's assets and liabilities, along with stockholder equity. An annual report is a document describing operations and financial position that every company listed on the stock market must provide to its shareholders.