Question

The financial statements of a business include Cash Flow Statement.

Hint:

Cash flow statement = mandatory part of modern financial reporting.

Answer 1

A complete set of financial statements includes the balance sheet, profit and loss account, and cash flow statement. The cash flow statement is essential as it records cash inflows and outflows under operating, investing, and financing activities. Accounting standards require companies to prepare it to provide transparency about liquidity and financial health. It helps investors and stakeholders understand how cash is generated and used by the business. Therefore, it is rightly considered part of financial statements.