Chapter 2, Problem 4CQ

Summary Introduction

To think critically about: The difference between the accounting statement of cash flows and financial cash flows.

Introduction:

Accounting statements of cash flows indicate how the items in the balance sheet and income statements has an effect on the cash and cash equivalents of the business. This statement is classified into 3 categories as follows:

• Operating activities
• Investing activities
• Financing activities

Financial cash flow deals with the perspective of finance. The ability to generate cash for the business is determined in the financial cash flow statements.