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 cash inflow and outflow from the selling goods, providing services and manufacturing. Long term capital and investing cost are not included in the operating activity. Financial Activity: Financial activity is the part of the cash flow statement. Financial activity involves the long term liability, borrowing and stockholder’s equity. All the changes in the long term liability, equity and borrowings reported in the financial statement. 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. 1. To identify: Case under which cash flow lags behind the net income.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 7BTN

To determine

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 cash inflow and outflow from the selling goods, providing services and manufacturing. Long term capital and investing cost are not included in the operating activity.

Financial Activity:

Financial activity is the part of the cash flow statement. Financial activity involves the long term liability, borrowing and stockholder’s equity. All the changes in the long term liability, equity and borrowings reported in the financial statement.

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.

1.

To identify: Case under which cash flow lags behind the net income.

2.

To determine

To identify: Sources of finance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Narrate how inflation impacts present value of cash flow. What do you mean by ‘beauty contest’ and discuss its impact on investment decision of investors in stock market.

When it comes to financial reporting, why are investors drawn to the income statement and cash flow statement? evaluate how much information the income statement vs the cash flow statement include.

Write an X in the appropriate column to show whether each of the following cash flows should be classified as an operating, investing, or financing. Also, indicate whether it represents a cash inflow or outflow. You may copy/paste the table below into your submission box. Cash Flow Operating Investing Financinga. Received cash from issuance of common stock ________ ________ ________ b. Net Income ________ ________ ________ c. Received cash from sale of used equipment ________ ________ ________ d. Paid cash dividends ________ ________ ________ e. Paid cash to settle a note payable ________ ________ ________ f. Paid cash to purchase new computer ________ ________ ________ g. Paid cash to pay…