[Solved] Which of the following activities is NOT included in cash fl (2024)

In general, the term ‘cash flow’ refers to the flow of cash in and out of the business. They are classified into three types of activities depending on the nature of the transactions.

These are: Operating, investing, or financing activities

∴ Estimating and costing activities are not included in Cash flow.

These three types of activities are briefly explained below:

1. Operating activities:

These activities include cash activities related to net income to run day-to-day business operations. For example, cash generated from the sale of goods (revenue) and cash paid for merchandise (expense), customers buying products, staff being paid, stock being purchased are all operating activities.

2. Investing activities:

These include cash activities related to noncurrent assets such as - long-term investments; property, plant, and equipment, the principal amount of loans made to other entities, cash generated from the sale of land, and cash paid for an investment in another company, etc. are included in this category.

3. Financing activities:

These include cash activities related to noncurrent liabilities and owners’ equity such as the principal amount of long-term debt, stock sales, and repurchases, dividend payments.

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Last updated on Feb 22, 2024