Which financial statement is used to track cash inflows and outflows?

The Cash Flow Statement is specifically designed to track cash inflows and outflows over a certain period. It provides detailed insights into how cash is generated and spent within a business, categorizing activities into three main types: operating, investing, and financing activities. This statement is crucial for assessing the liquidity and overall financial health of a business, allowing stakeholders to understand how effectively a company manages its cash position.

In contrast, the Income Statement primarily focuses on revenues and expenses, resulting in net income or loss, while it does not provide a direct view of cash movements. The Balance Sheet gives a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity without detailing cash flow specifics. The Retained Earnings Statement reflects changes in retained earnings over a period but does not include information about cash transactions. Therefore, the Cash Flow Statement is the relevant financial document for tracking cash movements accurately.