Statement of Cash Flows

MBAA-501-DLB (CRN-15.202612 Financial Accounting)

cash flow per share

The net cash flows from operating activities dividend by the number of common shares outstanding.

cash flows from (used for) financing activities

The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business.

cash flows from (used for) investing activities

The section of the statement of cash flows that reports cash flows from transactions affecting investments in noncurrent assets.

cash flows from (used for) operating activities

The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.

direct method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

free cash flow

A measure of the operating cash flow available to a company after it purchases the property, plant, and equipment (PP&E) necessary to maintain its current operations.

indirect method

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.

statement of cash flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

Identify if each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Purchase of patent

Investing

Identify if each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Payment of cash dividend

Financing

Identify if each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Disposal of equipment

Investing

Identify if each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Cash sales

operating

Purchase of treasury stock

Financing

Identify if each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows: Payment of wages expense

Operating

What would be on the operating activity for the statement of cash flows?

Cashed received from sales of goods, purchase of day-to-day supplies, purchase of inventory, utility bills, employee wages, and changes in accounts receivable and payable.

What would be on the investing activity for the statement of cash flows?

Purchase of investments in the market, acquisition of a business, loans, and purchase of a fixed asset.

What would be on the financing activity for the statement of cash flows?

Cash gained by equity, dividend payments, and repurchase of equity.