Which statement about cash flows is accurate?

Cash flows typically need to be reported gross to provide a clear picture of the cash inflows and outflows within an organization. This approach allows stakeholders to see the total cash generated from operating, investing, and financing activities without obscuring the details that each gross amount represents. Reporting cash flows on a gross basis enhances transparency and helps in analyzing the company's cash management and operational efficiency.

Gross reporting distinguishes individual components of cash flows, which is particularly useful for understanding the sources and uses of cash over a specific period. It helps users of financial statements gauge the effectiveness of operations, investment strategies, and the overall liquidity position of the entity.

In contrast, net reporting, which may be more appropriate in certain contexts, can obscure important information about the underlying cash movements unless it is required by specific accounting standards for certain types of transactions.