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Financing Activities
Activities that involve raising money from outside sources to fund operations.
Financing Activities
Borrowing monies from bank or public to fund operations. E.g., Generates liabilities (debt) – notes payable is monies borrowed from the bank, bonds payable is monies borrowed from public..
Financing Activities
Raising capital from public investors by issuing common stock (ownership) for cash. E.g., Payments of stockholder’s from profits are dividends.
Investing activities
Purchasing or selling long-term assets. E.g., Buildings, land, equipment.
Investing Activities
Purchasing or selling investments (stock or bonds) from other companies.
Operating activities
Selling goods or services to customers (revenues)
Operating activities
Purchasing inventory
Operating Activities
Day-to-day actions taken by a company to produce and sell products or provide services.
Operating activities
Extending credit to customers to allow time to pay (accounts receivable)
Operating activities
Generating expenses to run day-to-day operations (rent expense, interest expense, insurance expense, marketing expense, wages expense).
Operating activities
Requesting credit or extended time to pay from suppliers for common purchases (accounts payable).
Operating activities
Generating other liabilities by delaying payment (income taxes payable, sales tax
payable, wages payable, and interest payable)
Investing activities
use the cash raised through financing activities for the purchase of the resources a company needs.
Operating activities
the day-to-day actions taken by a company to produce and sell products or provide service.
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