Amy and Lester are the owners of The Hardware Store on main street in a large town. Without consulting Amy, Lester hires an accountant to get together a formal Balance Sheet, Income Statement, and Statement of Cash Flows for The Hardware Store. Amy understands the importance of having a Balance Sheet and Income Statement, but she does not understand the importance of having a Statement of Cash Flows. Amy reasons that examining the Cash account in the General Ledger is sufficient to know where the cash came from and where it was spent.

Presume you are the accountant that was hired by Lester. It is your task to explain to Amy the purpose of the Statement of Cash Flows along with its uses and limitations. Please make your initial post your response to Amy.