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Purpose of Statement of Cash Flows; types of Business Combinations

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1. A firm presents an income statement and a balance sheet, and the sophisticated financial statement user could approximate a statement of cash flows from this information. Since the statement of cash flows does not show any new accounts, why is it necessary to also present this statement?

2. Identify three major types of business combinations and provide an example of each.

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Solution Summary

The purpose of statements of cash flows for the type of business combinations are determined.

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Requirement 1
The cash flows statement, in spite of it not showing any new accounts, gives information as to the ability of the company's operations to finance itself and its investing and financing requirements. For example, the cash flows from operations section of ...

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