Concept explainers
Cash Flow Statement:
Cash flow statement is that statement in which, transaction related to cash are recorded. It is mandatory report and included in the financial statement of the company. It is divided into three parts operating activities, investing activity, and financial activity
Operating Activity:
Operating activity is the first part of the cash flow statement. The main focuses of the operating activity on the
Financial Activity:
Financial activity is the part of the cash flow statement. Financial activity involves the long term liability, borrowing and
Investing Activity:
Investing activity is the third part of the cash flow statement which gives the information related to the acquisition and disposal of the long term assets of the company such as land and building, investment and plant.
To Identify: Cash flow from operating activities
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Chapter 12 Solutions
FINANCIAL ACCOUNTING FUNDAMENTALS W/ CO
- What categories of activities are reported on the statement of cash flows? Does it matter in what order these sections are presented?arrow_forwardExplain the purpose of the statement of cash flows and why this statement is needed.arrow_forwardExplain the difference between the two methods used to prepare the operating section of the statement of cash flows. How do the results of these two approaches compare?arrow_forward
- Is there any significance that can be attributed to whether net cash flows are generated from operating activities, versus investing and/or financing activities? Explain.arrow_forwardWhen preparing the operating section of the statement of cash flows, using the indirect method, how must gains and losses be handled? Why?arrow_forwardUnder the direct method of preparing a statement of cash flows, what adjustment is made for depreciation expense?arrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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