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Bpp kit
Which one of the following statements correctly identifies a valid disadvantage to users of financial statements of the statement of cash flows?A Under IAS 7 Statement of Cash Flows, an entity may use any format for their statement
B There is an opportunity to reclassify some cash outflows that might have been reported in the operating section as investing cash outflows.
C Under IAS 7 Statement of Cash Flows the statement of cash flows may cover a different period of time to the other financial statements.
D Cash flow figures are more open to manipulation than the profit figure.
I am unable to understand and answer this. Answer is B and I did C.
Sorry professor for disturbance. It is for just few days as examination is within few days so want to gain as much as I can.C is wrong because the statement of cash flows must cover the same period as the other financial statements (the SOPL and SPFP). The fact that it cannot cover a different period is therefore not a disadvantage.
B is correct because some cash flows could have been shown under different headings.
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