1. The statement of clas flow:

(a)Explains the changes in cash that took place between two balance sheets

(b)Shows how much of the profit earned is available in cash

(c)Can be prepared in one of two formats: direct or indirect

(d)Represents one of the components of the financial statements

(e) A, C & D

2. Compared to the direct method, using the indirect method to prepare the statement of cash flows results in:

(a) Higher net cash flows from operating activities

(b)Lower net increases in cash

(c)Equal net cash flows from operating activities

(d)Higher cash balances at the end of the year