Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Questions: 12

Answer

The three main categories of the statement of cash flows are: Operating Activities, Investing Activities, and Financing Activities. The reason why these categories were chosen is because they represent the three principal types of business activities.

Work Step by Step

A cash flow statement is the financial statement that shows how changes in balance sheet accounts and income affect the cash and the cash equivalent of a corporation. Since the three main types of business activities are operating, investing, and financing activities, these are the items that would go on the statement of cash flows.
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