Which of the following would not be on the statement of cash flows?

Which of the following would not be on the statement of cash flows? cash flows from investing activities cash flows from financing activities cash flows from operating activities cash flows from contingent activities

Answer

General guidance

Concepts and reason
Accounting: Accounting refers to the process of recording the transactions, classifying it in a specific manner and further summarizing and analyzing is done after which the results are interpreted. Financial statements and ledger accounts are prepared in order to accomplish the procedure. Statement of cash flows: Cash flow statement is the statement which reflects the changes of all the business activities that increase or decrease the cash of the firm. Cash could have inflow or outflow from the three activities, namely investing, operating, and financing.

Fundamentals

Cash flow from investing activities: Cash flow from investing activities is the total exchange of cash resultant from the gain or losses incurred on the investment. Cash flow from operating activities: Cash flow from operating activities refers to the total aggregate of the cash resulting from the core operations of the business. Cash flow from financing activities: Cash flow from financing activities refers to the exchange of cash resulting from the financing activities which correspond to the debt, dividends, and so on.

Step-by-step

Step 1 of 2

Investing activities: Investing activities are the activities that are related to buying or selling of the capital assets. Financing activities: Financing activities are those activities that are related to financing the company such as issuance or debt or equity, payment of dividends, and buyback of shares or debt. Operating activities: Operating activities refer to the operations that are responsible for generating income, sales, and turnover.

Activities reported in the statement of cash flows: Cash flows statement includes the following: • Cash flows from operating activities. • Cash flows from investing activities. • Cash flows from financing activities. The above mentioned cash flows from various activities are the conclusive determiners of cash flows of the company for the accounting period. Cash flows from operating activities include the cash flows from core operations of the business related to sales and revenue. Cash flows from investing activities include the cash flows from activities that are the contributors of the investments made by the company, which are related to the cash flows of capital assets. Cash flows from financing activities include the cash flows related to financing activities, which relate to the debt, equity, and dividends of the company.

Step 2 of 2

The activities that are not reported in the statement of cash flows: Contigent activities: Contigent activities are the unforeseen activities that have an impact on the company’s operation and not just cash flows.

Thus, contingent activities are not part of the statement of cash flows.

Cash flows from contingent activities would not be on the statement of cash flows.


Contingent activities are not included in cash flows statement as contingent events are unforeseen events and are not a regular expense or income. If they are considered with cash flow, then it would be shown in the cash flows statement in the appropriate head of activities.

Answer

Cash flows from contingent activities would not be on the statement of cash flows.

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