Which financial accounting statement is prepared on a strict cash basis rather than an accrual basis?
AStatement of Cash Flows
BStatement of Changes in Equity
CBalance Sheet
DIncome Statement
Explanation
* Statement of Cash Flows reports actual cash receipts and cash payments, converting accrual accounting back to cash basis.
* Income Statement and Balance Sheet strictly adhere to accrual accounting principles.
* Evaluates real liquidity and cash generation capability.
Exam Relevance
- Topic: Financial Accounting
- Subtopic: Cash Flow Analysis

No Comments