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Foundations of Business - Standalo...

4th Edition
William M. Pride + 2 others
ISBN: 9781285193946

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BuyFindarrow_forward

Foundations of Business - Standalo...

4th Edition
William M. Pride + 2 others
ISBN: 9781285193946
Textbook Problem

In a statement of cash flows, what is included in the operating activities section? In the investing activities section? In the financial activities section?

Summary Introduction

To determine: The inclusions in operating activities section, investing activities section and financial activities section of a cash flow statement.

Introduction: The statement of cash flows, additionally termed as cash flow statement, is a financial statement that reports records the cash inflows and outflows amid a bookkeeping period.

Explanation

The inclusions in operating activities section, investing activities section and financial activities section of a cash flow statement are as follows:

  • Cash flow from operating activities: This is the initial phase of a statement of cash flows. It demonstrates to the organization's initial income source by giving products and services. Normal modifications incorporate adding the amount of depreciation to a company's net income. Different changes for increment or reduction in the amounts for accounts receivable, accounts payable, stock, and income taxes to be paid are additionally necessary to replicate a genuine picture of cash flows from operating activities...

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