Questions: The cash flow statement can take many formats but the most common one breaks the statement into three sections: Cash from operating activities, Cash from financing activities and
Cash from investing activites
Transcript text: The cash flow statement can take many formats but the most common one breaks the statement into three sections: Cash from operating activities, Cash from financing activities and
Cash from investing activites
Solution
Answer
The answer is Cash from investing activities.
Explanation
Option 1: Cash in owners account
This is not a standard section in a cash flow statement. The cash flow statement focuses on the movement of cash within the business, not specifically on the owners' accounts.
Option 2: Cash from investing activities
This is a standard section in a cash flow statement. It includes cash flows related to the acquisition and disposal of long-term assets and investments. This section helps in understanding how much the company is investing in its future operations.
Option 3: Cash from depreciation
Depreciation is a non-cash expense and does not directly affect the cash flow. It is accounted for in the operating activities section as an adjustment to net income.
Option 4: Cash from closing balance
The closing balance is the result of the cash flow statement, not a section within it. It represents the ending cash balance after accounting for all cash inflows and outflows during the period.