The statement of cash flows summarizes the flow of funds into and out of the community association, including normal operations, investment activities, and borrowing activities. Which activities are shown?

The statement of cash flows summarizes the flow of funds into and out of the community association, including normal operations, investment activities, and borrowing activities. Which activities are shown?

• A. Operating, investing, and financing (borrowing) activities.
• B. Operating and investing only.
• C. Financing and investing only.
• D. Net income and expenses.

Answer: (A)

The statement of cash flows reports cash movements in three activity areas: operating, investing, and financing. Operating activities reflect the cash effects of the association’s day-to-day operations (dues, fees, payments to suppliers and staff, etc.). Investing activities cover cash used for acquiring or disposing of long-term assets and investments. Financing activities capture cash from borrowing and loan repayments (and similar financing sources). Net income and expenses appear on the income statement, not as a cash-flow category, though net income can be reconciled to cash flow under the indirect method. Since the question mentions borrowing activities, financing is included, so the best description is operating, investing, and financing activities.

The statement of cash flows reports cash movements in three activity areas: operating, investing, and financing. Operating activities reflect the cash effects of the association’s day-to-day operations (dues, fees, payments to suppliers and staff, etc.). Investing activities cover cash used for acquiring or disposing of long-term assets and investments. Financing activities capture cash from borrowing and loan repayments (and similar financing sources). Net income and expenses appear on the income statement, not as a cash-flow category, though net income can be reconciled to cash flow under the indirect method. Since the question mentions borrowing activities, financing is included, so the best description is operating, investing, and financing activities.