What three types of activities should be included in a Statement of Cash Flows?

The Statement of Cash Flows is a crucial financial statement that provides insight into how a company generates and uses cash. The correct inclusion of Operating, Investing, and Financing activities captures the complete picture of cash movement within a company.

Operating activities reflect the cash generated or used in the day-to-day operations of the business, including cash receipts from sales of goods or services and cash payments to suppliers and employees. This section is critical for understanding the cash flow from regular business operations.

Investing activities account for cash transactions for the purchase and sale of physical and financial investments. This can include buying equipment or selling assets, which can significantly impact the company's cash position.

Financing activities encompass cash transactions that involve raising capital or repaying debts. This includes issuing stock, paying dividends, or taking out loans. These transactions are vital as they depict how a company finances its operations and growth.

Collectively, these three categories provide a comprehensive overview of the cash flow dynamics within a business, allowing stakeholders to assess liquidity, financial stability, and overall cash management. Other options do not encompass all the necessary components for a well-rounded Statement of Cash Flows, which is why they do not represent the complete, correct choice.