CUET Preparation Today
The Cash Flow Statement classifies cash flows into which categories? |
Position, investment, and financing activities Revenues, expenses, and equity Operating, investing, and financing activities Assets, liabilities, and equity |
Operating, investing, and financing activities |
The correct answer is option 3- Operating, investing, and financing activities. The various activities of an enterprise result into cash flows (inflows or receipts and outflows or payments) which is the subject matter of a cash flow statement. As per AS-3, these activities are to be classified into three categories: (1) operating, (2) investing, and (3) financing activities so as to show separately the cash flows generated (or used) by (in) these activities. This helps the users of cash flow statement to assess the impact of these activities on the financial position of an enterprise and also on its cash and cash equivalents. |
