Question: Which statement is correct? 1. The statement of cash flows is based on net amounts. 2. The statement of cash flows is based on revenue

Which statement is correct?

1. The statement of cash flows is based on net amounts.

2. The statement of cash flows is based on revenue and expenses adjusted for prepayments.

3. The statement of cash flows is based on payments (gross amounts).

4. The statement of cash flows considers profits plus prepayments.

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