Question

The three categories of a​ firm's statement of cash flows are​________.

A. cash flow from operating​ activities, cash flow from noncash​ activities, and cash flow from financing activities
B. cash flow from operating​ activities, cash flow from investment​activities, and cash flow from noncash activities
C. cash flow from equity​ activities, cash flow from investment​ activities, and cash flow from financing activities
D. cash flow from operating​activities, cash flow from investment​ activities, and cash flow from financing activities

Answer 1

The three categories of a firm's statement of cash flows are cash flow from operating activities, cash flow from investment activities, and cash flow from financing activities.

Step-by-step explanation:

The three categories of a firm's statement of cash flows are:

1. Cash flow from operating activities: This includes cash receipts and cash payments that are directly related to the firm's core operations. Examples include cash received from customers for sales and cash paid to suppliers for inventory.
2. Cash flow from investment activities: This category includes cash flows from the buying and selling of long-term assets, such as property, plant, and equipment. It also includes cash flows from investments in other companies, such as buying or selling stocks or bonds.
3. Cash flow from financing activities: This category includes cash flows related to the firm's financing sources, such as borrowing from banks or issuing stock. Examples include cash received from issuing bonds and cash paid for dividends to shareholders.