Multiple Choice
Which of the following is typically included in cash flows from financing activities on the statement of cash flows?
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13. Statement of Cash Flows
Introduction to the Statement of Cash Flows
Multiple Choice
In the context of the statement of cash flows, frequent, consistent cash flows are best described as:
A
Operating activities
B
Investing activities
C
Financing activities
D
Non-cash transactions
Verified step by step guidance1
Understand the categories of cash flows in the statement of cash flows: Operating activities, Investing activities, Financing activities, and Non-cash transactions.
Recognize that operating activities include cash flows related to the core business operations, such as cash received from customers and cash paid to suppliers and employees. These are frequent and consistent cash flows.
Identify that investing activities involve cash flows from the purchase or sale of long-term assets, such as property, plant, and equipment, or investments. These are typically less frequent.
Understand that financing activities include cash flows related to borrowing, repaying debt, issuing equity, or paying dividends. These are also less frequent compared to operating activities.
Note that non-cash transactions, such as issuing stock to purchase assets, do not involve cash flows and are disclosed separately in the statement of cash flows. Therefore, frequent, consistent cash flows are best described as operating activities.
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