CHAPTER 10

Statement of Cash Flows

summarizing the operating, investing, and financing activities of an entity; provide information about cash receipts and cash payments of an entity during a period.

Cash Equivalents

short term highly liquid investments that are readily convertible to known amount of cash which are subject to an insignificant risk of change in value.

Cash Flow

inflow and outflow of cash and cash equivalent

Operating Activities

cash flows derived primarily from the principal revenue producing activities of the entity; transactions that enter into the determination of net income or loss.

Investing Activities

cash flows derived from the acquisition and disposal of long term assets and other investments not included in cash equivalents.

Financing Activities

cash flows derived from the equity capital and borrowings of the entity; include cash flows from transactions involving non trade liabilities and equity of an entity.

Equity Financing

transactions between the entity and owners

Debt Financing

transactions between the entity and creditors

Operating Cash Flows

Interest Paid and Interest Received

Financing Cash Flows

Interest Paid

Investing Cash Flows

Interest Received

Operating/Investing Cash Flows

Dividend Received

Financing/Operating Cash Flows.

Dividend Paid