ACC 421 week 4 DQ 2 - 1736

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What is included in each section of the statement of cash flows? What does each section tell you about a company? Which of the three classifications of activities included on a statement of cash flows is the most important? Why?

Solution Description

There are three sections in the cash flow statement: operating, investing, and financing. In the operating activities the items contained in it are cash receipts and cash payments. These come from receiving payments from accounts receivables or paying suppliers for inventory purchases. It also pertains to interest received from loans or dividends from investments. Other areas of payments would be employee’s paych