(a)   Explain the purposes of the statement of cash flows. (b)   List and describe the three categories of activities that must be reported in the statement of cash flows. (c)   Identify and describe the two methods that are allowed for reporting cash flows from operations.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter14: Statement Of Cash Flows
Section: Chapter Questions
Problem 22BEA
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Read CA23-5 found in the end of chapter materials of Chapter 23 and answer the related questions.

CA23-5.  

(Purpose and Elements of SCF)

GAAP requires the statement of cash flows be presented when financial statements are prepared.

Instructions
(a)  

Explain the purposes of the statement of cash flows.

(b)  

List and describe the three categories of activities that must be reported in the statement of cash flows.

(c)  

Identify and describe the two methods that are allowed for reporting cash flows from operations.

(d)  

Describe the financial statement presentation of noncash investing and financing transactions. Include in your description an example of a noncash investing and financing transaction.

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