Core idea
The statement of cash flows reconciles cash activity by operating, investing, and financing activities. FAR questions often ask whether you can classify transactions before doing arithmetic.
FAR topic guide
Statement of cash flows for FAR CPA candidates.
Cash flow questions often test classification discipline. The numbers matter, but the first job is deciding whether a cash movement belongs in operating, investing, financing, or a noncash disclosure.
Last reviewed July 31, 2026. World of Accountants is independent and not affiliated with the AICPA, NASBA, Becker, NINJA, UWorld, Gleim, or other CPA review providers.
What FAR likes to test
Watch for indirect method adjustments, gains and losses, depreciation, receivables, payables, dividends, interest, debt proceeds, asset purchases, and noncash investing or financing activity.
Common miss
Candidates often chase net income instead of asking whether the transaction affected cash and which cash flow section it belongs in.
How to practice
Label each fact as operating, investing, financing, or noncash before calculating. That prevents most statement-of-cash-flows misses.
FAR topic guides
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AUD / FAR / REG / BAR / ISC / TCPHard CPA practice questions for exam-like reviewHard CPA questions across all six sections with explanations and review tools.
AUD / FAR / REG / BAR / ISC / TCPCPA practice test-style MCQ setsBuild a practice test-style MCQ set with explanations and section filters.
Practice loop
Use the topic, then answer questions while the idea is fresh.
Short practice sets are enough to expose whether the rule is sticking.