Even though assets must always equal the sum of liabilities and owners' equity,the net cash flow from operations does not have to equal the sum of the net cash flow from investing activities and the net cash flow from financing activities.

Question

Quizplus · Accepted Answer

The net cash flow from operations, investing activities, and financing activities are all separate sections of the statement of cash flows and do not necessarily have to equal each other. However, the total change in cash for the period should be reflected as an adjustment in the cash and cash equivalents balance on the balance sheet, which should ultimately balance with total assets and liabilities and equity.

Even Though Assets Must Always Equal the Sum of Liabilities