Practicing Success
According to Accounting standard 3, Cash flows are classified into ______. |
Operating Activities and Investing Activities. Investing Activities and Financing Activities. Operating Activities and Financing Activities. Financing Activities, Operating Activities, and Investing Activities. |
Financing Activities, Operating Activities, and Investing Activities. |
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. |