Explain the relationship between changes in cash and the changes in the statement of financial position accounts.

- Because of timing issues between the recognition of revenues and expenses and the inflows and outflows of cash, information about a company's cash flows can be obtained by examining the changes in the statement of financial position account balances over a period.

- Increases in cash result from increases in liabilities, increases in shareholders' equity, and decreases in noncash assets.

- Decreases in cash result from decreases in liabilities, decreases in shareholders' equity, and increases in noncash assets.