Question

Rearrange the following in the correct sequence of Cash Flow Statements: A. Calculation of cash flow from investing Activities
B. Opening Balance of cash and cash Equivalents
C. Calculation of cash flow from operating Activities
D. Calculation of cash flow from financing Activities
E. Closing Balance of Cash and Cash Equivalents
Choose the correct answer from the options given below:

• A. B, C, A, D, E
• B. A, C, D, B, E
• C. B, E, C, A, D
• D. C, A, D, B, E

Hint:

Cash flow statements generally present operating, investing, and financing activities in order, then reconcile opening and closing cash balances.

Answer 1

The Correct Option is D

Step 1: Calculation of cash flow from operating Activities
Cash flows statement generally starts with cash flows from operating activities, as it reflects core business cash generation.
Step 2: Calculation of cash flow from investing Activities
Next, cash flows from investing activities like purchase and sale of fixed assets are calculated.
Step 3: Calculation of cash flow from financing Activities
Then, cash flows from financing activities such as loans and capital changes are calculated.
Step 4: Opening Balance of cash and cash Equivalents
Opening balance of cash is noted, usually to reconcile the net changes in cash flows.
Step 5: Closing Balance of Cash and Cash Equivalents
Finally, closing balance is computed to confirm the cash position at the end of the period.
Step 6: Conclusion
Hence, the correct sequence is:
C (Operating), A (Investing), D (Financing), B (Opening Balance), E (Closing Balance).