Accounting standards: a. allow companies to omit the statement of cash flows fro

Question

Accounting standards:

a. allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset. b. require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities. c. require that companies include a statement of cash flows in a complete set of financial statements. d. allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets. e. allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities.

Explanation / Answer

According accounting standard 3, every company fall in the criteria specified by the standard should prepare and submit the cash flows statement under indirect method. This is the mandatory requirement to companies.

Hence, correct option is ( C)

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