Please answer the following questions in your own words.

1) What is the purpose of Statement of Cash Flows?

2) Why do we need Statement of Cash Flows?

3)Statement of Cash Flows tracks net changes in cash flow. Transactions are grouped into 3 categories, Operating, Financing and Investing.

Provide one sample transaction for Financial Activity Cash Inflow. (i.e. borrow $5000 from the bank)

Provide one sample transaction for Investing Activity Cash Outflow. (i.e. purchase a truck)

4) Companies prefer the Indirect Method for Operating activity. What is the starting point?