Cash Flow Statement Classification

Easy Financial Statements Cash Flow Statement

The cash flow statement provides valuable information about the cash inflows and outflows of a business during a specific period. It is categorized into three sections: operating activities, investing activities, and financing activities. Understanding how various transactions affect cash flow is crucial for assessing a company's liquidity and overall financial health.

An analyst is reviewing the cash flow statement of Company XYZ for the year ended December 31, 2022. The company reported the following cash flows: cash received from customers, cash paid to suppliers, and cash paid for operating expenses. Given these transactions, which of the following is true regarding Company XYZ's cash flow statement?

Cash received from customers is recorded as a cash inflow in the operating activities section.

Cash paid to suppliers is recorded as a cash outflow in the investing activities section.

Cash paid for operating expenses is recorded as a cash inflow in the financing activities section.

Hint

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