Amy and Lester are the owners of The Hardware Store on mainstreet in a large town. Without consulting Amy, Lester hires anaccountant to prepare a formal Balance Sheet, Income Statement, andStatement of Cash Flows for The Hardware Store. Amy understands theimportance of having a Balance Sheet and Income Statement, but shedoes not understand the importance of having a Statement of CashFlows. Amy reasons that examining the Cash account in the GeneralLedger is sufficient to know where the cash came from and where itwas spent. Presume you are the accountant that was hired by Lester.It is your task to explain to Amy the purpose of the Statement ofCash Flows along with its uses and limitations. Please make yourinitial post your response to Amy.
