A statement of cash flows and the income statement are the only two statements that explain the reasons for inflows and outflows of cash true or false?

False. While the statement of cash flows and the income statement provide insights into cash inflows and outflows, they are not the only financial statements that can explain these movements. The balance sheet also plays a crucial role by showing how changes in assets, liabilities, and equity affect cash flows, particularly through operating, investing, and financing activities.