Over which period does a cash-flow statement summarize income and expenses?

Over which period does a cash-flow statement summarize income and expenses?

• A. A single day
• B. A year
• C. A specific time period
• D. The previous quarter

Answer: (C)

A cash-flow statement shows how cash moved in and out during a defined window. That window is chosen for the report, so the statement sums all cash inflows and outflows for that specific period—whether it’s a month, a quarter, or a year. It wouldn’t be meaningful to use just one day, since many transactions occur across multiple days; and while a year is a common window, the key idea is that the period is clearly defined. A prior quarter is simply one possible window, but the concept works for any specified time period.

A cash-flow statement shows how cash moved in and out during a defined window. That window is chosen for the report, so the statement sums all cash inflows and outflows for that specific period—whether it’s a month, a quarter, or a year. It wouldn’t be meaningful to use just one day, since many transactions occur across multiple days; and while a year is a common window, the key idea is that the period is clearly defined. A prior quarter is simply one possible window, but the concept works for any specified time period.