The president of a company, which is being audited for the first time, is concerned about all

Question:

The president of a company, which is being audited for the first time, is concerned about all the unnecessary financial information the company is being required to disclose, and says, “We have always prepared only a and an income statement. Surely these are enough. The only information anyone is interested in is how much we earned and what we have left. Now I am told we must prepare a statement of cash flows. What is this statement, what information does it provide, what are the major sections of the statement, and what is included in each section (under the indirect method)?”

Required
Prepare a written response that answers the president’s questions.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...