24.

Visualize an average U.S. manufacturing company, and think about its Statement of Cash Flows.

Statement 1: The statements format formally organizes the firms cash flows into two categories: Cash inflows and Cash outflows.

Statement 2: Its purpose is to identify changes in a firms cash position by reporting the flows of cash into and out of the company.

Statement 3: The Statement of Cash Flows is reported for a point in time.

Statement 4: In this report, cash flows are organized into three categories called Operating cash flows, Investing cash flows, and Financing cash flows.

Statement 5: An important benefit of this financial statement is that it identifies the differences in a firms cash position that results from the use of accrual accounting in the preparation of its income statement.

Which of the following selections relating to these statements is true?

a. Statements 1, 2 and 5 are correct.

b. Statements 1 and 3 are correct.

c. Statements 2, 4 and 5 are correct.

d. All of the statements are correct.