Question

The statement of cash flows provides aggregate data regarding all cash inflows a firm receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for company’s capital budgets and investments during a given accounting period.

True

False

Answer 1

The Statement of Cash flows provides aggregate data regarding all cash inflows a firm receives from its ongoing operations and

external investment sources, as well as all cash outflows that pay for comapny's capital budgets and investments during a given accounting period.  

In question it has been asked whether above statement is true or false ?

Before answering for the same we will first understand the basic regarding Statement of Cash Flow.

On the base of that , we will provide answer for the above statement whether same is true or false.

Basic Understanding of Cash Flow Statement is as follow :

Cash flow statement is a statement which provides data regarding all the cash inflow and outflow occured by business or firm or company during the said period.

It is a summarised statement of cash inflow and outflow of a perticular period.  

Cash flow statement show how well the company manages its funds to pay its debts and operating acivities.  

Cash flow statement has mainly divided in three sections. Which are as follow :

1. Cash flow from Operating Activities.  

2. Cash flow from Investing Activities.  

3. Cash flow from Financing Activities.  

We will understand basic of all above three activities.

1. Cash flow from operating Activities.  

The operating activities means company's core business activities. Cash inflow and outflow that generated by a company's core business activity.  

Operating activities includes  receipts from sale of goods and services , interest payments , payment made to suppliers for purchase , payment for salary and wages ,

any operating expenses payment.

2.Cash Flow from Investing Activities .  

The cash inflow and outflow from company's investing activities are inculded in this section of cash flow.  

Investing activities incudes purchase or sale of assets , taking loan and giving loan , and cash inflow and outflow genrated by activities related to investing will consider in this section of cash flow.  

3. Cash flow from Fianacing Activities.  

The cash inflow and outflow from finacing activities are included in this section of cash flow.  

Financing activities inculedes payment of dividend, issue of Stock , Repurchase of stock , proceeds from long term debt , issuing bonds etc.  

So by understanding above basic of cash flow we are able to understand that , The Statement of Cash flows provides aggregate data regarding all cash inflows a firm or comapny or business receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for comapny's capital budgets and investments during a given accounting period.  

So Above Statement is True.