Rearrange the following in correct sequence of cash flow statements.

A) Calculation of cash flow from investing activities
B) Opening balance of cash and cash equivalents
C) Calculation of cash flow from operating activities
D) Calculation of cash flow from financing activities
E) Closing balance of cash and cash equivalents

Choose the correct answer from the options given below-

C, A, D, B, E

The correct answer is option 4- C, A, D, B, E.

This is the correct sequence of preparing cash flow statement-

C (Calculation of cash flow from operating activities): The first step is calculating the cash flow from operating activities, as this is a core component of the cash flow statement.

A (Calculation of cash flow from investing activities): After operating activities, you calculate the cash flow from investing activities, such as the purchase and sale of assets.

D (Calculation of cash flow from financing activities): Next, the cash flow from financing activities is calculated, involving activities like issuing or repaying debt and equity.

B (Opening balance of cash and cash equivalents): After calculating the cash flows from the above activities, you add the opening balance of cash and cash equivalents to this information.

E (Closing balance of cash and cash equivalents): Finally, you calculate the closing balance of cash and cash equivalents by adding the net cash flows to the opening balance.