Which statement is true regarding the statement of cash flows?

The statement of cash flows is an essential financial report that provides insight into a company's cash inflows and outflows over a specific period. One key aspect of this statement is its framework for organizing cash flows. It categorizes cash flows into three distinct activities: operating, investing, and financing.

This categorization is significant because it helps stakeholders understand how cash is generated and used within the business. Operating activities reflect the cash flows from the company's core business functions, investing activities show the cash used for investments in assets and growth initiatives, and financing activities detail cash flows related to borrowing, repaying debts, and equity transactions. By breaking down cash flows into these categories, the statement of cash flows offers a clear and structured view of a company's financial resilience and operational efficiency.

The other choices do not accurately reflect the characteristics of the statement of cash flows. It includes more than just operating cash flows, it is a requirement for publicly traded companies rather than optional, and while non-cash transactions may be disclosed in other parts of the financial statements, they are not included in the cash flow statement itself. Thus, categorizing cash flows into operating, investing, and financing activities stands as a true and fundamental aspect of the statement of cash flows.