CS Executive · Corporate Accounting and Financial Management · Cash Flows
Under AS 3 Cash Flow Statements, how must a cash flow statement report the cash flows of an enterprise during the period?
AS 3 requires the cash flow statement to report cash flows for the period classified by operating, investing and financing activities. This gives users a structured view of where cash was generated and used, rather than any classification by cost behaviour or balance sheet grouping.
- AClassified into operating, investing and financing activitiesCorrect
- BClassified into fixed, variable and semi-variable flows
- CClassified only into inflows from sales and outflows for purchases
- DClassified into current and non-current flows based on the balance sheet
Explanation
AS 3 states that the cash flow statement should report cash flows during the period classified by operating, investing and financing activities. The other classifications are not used by the standard.
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