Statement of
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.
Cash flow from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company.
Cash flow from financing activities: This section of cash flows statement provides information about the
To indicate: The given items affect operating (O) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction, and whether it represents a cash inflow or
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Financial Accounting
- In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. collected accounts receivable from customers B. issued common stock for cash C. declared and paid dividends D. paid accounts payable balance E. sold a long-term asset for the same amount as purchasedarrow_forwardWhich of the following sentences regarding the statement of cash flows is false? The statement of cash flows describes the companys cash receipts and cash payments for a period of time. The statement of cash flows reconciles the beginning and ending cash balances shown on the balance sheet. The statement of cash flows reports cash flows in three categories: cash flows from business activities, cash flows from investing activities, and cash flows from financing activities. The statement of cash flows may be used by creditors to asses the creditworthiness of a company.arrow_forwardIn a completed worksheet, a. the debit column contains the cash inflows. b. the debit column contains the cash outflows. c. the credit column contains the cash inflows. d. the credit column contains only operating cash flows. e. None of these.arrow_forward
- Use the following cash transactions relating to Lucknow Company to determine the cash flows from operating, using the direct method.arrow_forwardMatch the following assertions with their associated description: (a) existence/occurrence, (b) completeness. (c) rights and obligations, (d) valuation or allocation, (e) presentation and disclosure. 1. Cash accounts arc properly classified on the balance sheet and disclosed in the notes to the financial statements. 2. Cash balances exist at the balance sheet date. 3. The recorded balances reflect the true underlying economic value of those assets. 4. The company has title to the cash accounts as of the balance sheet date. 5. Cash balances include all cash transactions that have taken place during the period.arrow_forwardWhich of the following would be considered a cash outflow for investing activities? a. cash paid to purchase product for inventory b. cash paid to reacquire common stock c. cash paid to repay debt d. cash paid to purchase equipmentarrow_forward
- Preparing a Statement of Cash Flows-Direct Method The controller of Newstrom Software Inc. provides the following information as the basis for a statement of cash flows: Required: 1. Calculate the net cash provided (used) by operating activities. 2. Calculate the net cash provided (used) by investing activities. 3. Calculate the net cash provided (used) by financing activities.arrow_forwardDescribe three examples of operating activities, and identify whether each of them represents cash collected or cash spent.arrow_forwardIn which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. paid advertising expense B. paid dividends to shareholders C. purchased business equipment D. sold merchandise to customers E. purchased plant assetsarrow_forward
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