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Explain what types of transactions are reported in the Operating, Investing, and Financing activity sections of...

Explain what types of transactions are reported in the Operating, Investing, and Financing activity sections of the statement of cash flows.
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Answer #1

Operating Activity Section of Statement of Cash Flows:

Operating Activity section includes all the cash transaction related to operation of the company during the year. Like, cash received from customers, cash paid to suppliers, cash paid for expenses, etc.

Investing Activity Section of Statement of Cash Flows:

Investing Activity section includes all the cash transaction related to sell or purchase of fixed assets or investments. Like, sale or purchase of equipment, sale or purchase of long-term investments, etc.

Financing Activity Section of Statement of Cash Flows:

Financing Activity section includes all the cash transaction related to issue or repayment of common stock, bonds, payment of dividends, etc.

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