When the cash flows from operating, investing, and financing activities are combined to arrive at the overall net change in cash, a net decrease in cash is subtracted from the beginning cash to calculate the ending cash balance.

Question

Quizplus · Accepted Answer

When there is a net decrease in cash, it means that more cash is going out of the company than coming in, resulting in a lower ending cash balance than the beginning balance. This decrease is subtracted from the beginning cash balance to arrive at the ending cash balance.

When the Cash Flows from Operating, Investing, and Financing Activities