In the cash flow statement,net cash flows from operating activities plus net cash flows from investing activities plus net cash flows from financing activities for the period equal:
A) the cash balances at the beginning of the period
B) net profit
C) the cash balances at the end of the period
D) the total net increase or decrease in cash held for the period

Question

Quizplus · Accepted Answer

The net cash flows from operating activities, investing activities, and financing activities are all reflected in the change in cash held for the period, which is the total net increase or decrease in cash. Therefore, the sum of these three inflows or outflows will equal the change in cash held for the period, as stated in option D. Options A and C are incorrect because they refer to cash balances at different points in time, whereas the cash flow statement tracks changes in cash balances over the period. Option B is also incorrect because net profit does not capture all of the inflows and outflows of cash.

In the Cash Flow Statement,net Cash Flows from Operating Activities