Question : A cash flow statement is also prepared to determine the :
Option 1: Debt Position of the orgnization
Option 2: Liquidity position of the orgnization
Option 3: Net profit position of the orgnization
Option 4: None of the above
Correct Answer: Liquidity position of the orgnization
Solution : The CFS, often referred to as the statement of cash flows, aids creditors in determining how much cash is available (also known as liquidity) for the business to meet its operational costs and settle its debts. Investors value the CFS equally since it lets them know whether a company is financially stable.
hence the correct answer is option 2.




