(Purpose and Elements of SCF) In 1987 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 95, “Statement of Cash Flows.”

Instructions

(a) Explain the purposes of the statement of cash flows.

(b) List and describe the three categories of activities that must be reported in the statement of cash flows.

(c) Identify and describe the two methods that are allowed for reporting cash flows from operations.

(d) Describe the financial statement presentation of noncash investing and financing transactions.
Include in your description an example of a noncash investing and financing transaction.