statement of cash flows

Operating Activities terms

• Receivables

• Inventory

• Payables

• Depreciation

• Net Income

Investing activities

• Equipment

• Land

• Buildings

• Investments

• Loans

financing activies

• Bonds

• Notes Payable

• Common Stock

• Treasury Stock

• Dividends

WHat is the difference between direct and indirect method

Direct Method = reports actual cash receipts and cash payments.

Indirect Method = starts with net income and adjusts it.

What do you do with current assets when adjusting Net Income ?

They go the opposite way

What do you do with current liabilities when adjusting Net Income ?

They go the same way

What are 3 non cash activities that can trick you on an exam

• Stock dividends

• Bond conversions

• Stock issued for land/equipment

What are some exam traps that are operating activities ???

• Cash interest received

• Cash interest paid

• Cash dividends received

• Cash Interest Receipt

How are dividends paid and dividends received handled on the activities

Dividends paid is financing
Dividends Received is Operating

How is interest handled on the statements ?

Interest received and paid is operating

When you buy outside stock (stock that isn’t your companys)

Investing

When you see issue stock or treasury stock

Financing Activities

when you see buy or sell investment stock

Investing