The statement of cash flows measures cash flows on a(n) _____ basis.Group of answer choicescashseasonalaccrualnormalized

The statement of cash flows measures cash flows on a(n) cash basis.

This means it records cash transactions when cash is actually received or paid out, rather than when income is earned or expenses are incurred. Unlike the accrual basis of accounting, which recognizes revenues and expenses when they are incurred regardless of cash movement, the cash basis provides a clear picture of the cash available at any given time. This is particularly useful for stakeholders who are interested in the liquidity and cash management of a business.

In summary, the statement of cash flows captures the inflow and outflow of cash, providing crucial insights into the operational performance and financial position of an organization.