Which activities are reported in the Statement of Cash Flows?

Which activities are reported in the Statement of Cash Flows?

• A. Operating activities
• B. Investing activities
• C. Financing activities
• D. All of the above

Answer: (D)

Three kinds of activities are reported in the cash flow statement, each showing a different source or use of cash: operating activities, investing activities, and financing activities. Operating activities cover cash generated or used by the hospital’s main operations—receipts from patient services and payments for salaries, supplies, and other day-to-day expenses. Investing activities track cash involved in long-term assets and investments, such as purchasing or selling equipment, buildings, or securities. Financing activities reflect cash flows related to the hospital’s capital structure—borrowing funds, repaying debt, issuing stock, and paying dividends. Because all of these areas affect the hospital’s cash position, the statement presents cash flows from all three categories. Therefore, all of the above is the correct choice. This format helps assess liquidity and the ability to fund operations and capital projects.

Three kinds of activities are reported in the cash flow statement, each showing a different source or use of cash: operating activities, investing activities, and financing activities.

Operating activities cover cash generated or used by the hospital’s main operations—receipts from patient services and payments for salaries, supplies, and other day-to-day expenses. Investing activities track cash involved in long-term assets and investments, such as purchasing or selling equipment, buildings, or securities. Financing activities reflect cash flows related to the hospital’s capital structure—borrowing funds, repaying debt, issuing stock, and paying dividends.

Because all of these areas affect the hospital’s cash position, the statement presents cash flows from all three categories. Therefore, all of the above is the correct choice. This format helps assess liquidity and the ability to fund operations and capital projects.