Question

Which of the following is a section of the statement of cash flows?

a. Cash flow from noncash activities

b. Cash budget

c. Current assets

d. Cash flow from operating activities

Answer 1

Option d

The Statement of cash flows is prepared from the financial statements which are prepared on accrual basis. The financial statements depict the accrued incomes and expenses. The Cash flow statement is prepared to depict only the cash flows from different sources and the uses of cash. The cash flow from operating activities is a section which shows the cash flow from operations of the business. This excludes all non operating incomes and expenses and also non cash expenses such as depreciation.

Option a is irrelevant as there is no such term

Option b refers to the budget prepared showing cash inflow and outflow. But this is a part of budgeting and is not the final cash flow statement.

Option c is short term assets used for meeting current liabilities.