ACCT 3312 chap 22 SCF

operating activities

day-to-day business activities; cash effect of transactions that enter into NI, changes in op assets and liab, adj for noncash items

OA indirect method

converts NI into cash from operations

OA indirect: noncash rev, gains, exp, and loss

effect NI but not cash
SUBTRACT non cash rev/gains
ADD noncash exp and losses

OA indirect: changing in operating asset and liab

assets: SUBTRACT increase, ADD decrease
liab: SUBTRACT decrease, ADD increase

OA indirect: cash flows that hit cash but not NI

don’t touch IS
ex: selling and purch inv, notes issued for op act

OA direct method

reports gross cash receipts and pyts, accural items are converted to cash basis, must include conversion/reconciliation to indirect method
SUBTRACT cash paid
ADD cash receievedreceived

investing activitesactivities

long term assets and investments
ex: purch/sale of PPE, intangible assets, inv(except trading sec), loans made to other entities, capitalized int is included in cash paid for fixed assetslong-term

financing activities

obtaining or repaying capital
ex: issuing stock, borrowing/repaying debt, paying div, princ pymts on sales type leases and installment notes