The correct order of activities for the preparation of a statement of cash flows is:
A) cash flows from financing activities, cash flows from operating activities, cash flows from investing activities.
B) cash flows from investing activities, cash flows from financing activities, cash flows from operating activities.
C) cash flows from operating activities, cash flows from investing activities, cash flows from financing activities.
D) cash flows from investing activities, cash flows from operating activities, cash flows from financing activities.

Question

Quizplus · Accepted Answer

The correct order of activities for the preparation of a statement of cash flows is cash flows from operating activities, cash flows from investing activities, cash flows from financing activities. This order represents the sequence of cash inflows and outflows that are most relevant for understanding a company's financial performance and liquidity. Operating activities represent the core revenue and expenses of a business, followed by investing activities that reflect changes in long-term assets, and finally financing activities that capture changes in debt and equity.

The Correct Order of Activities for the Preparation of a Statement