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Flashcards in Cash Flow📎 Deck (14):
1

Cash receipt=

Cash in flow

2

Cash payment=

Cash outflow

3

Cash flow answer the question (purpose of cash flow):

1-How does a company obtain its cash
2-Where does a company spend its cash
3-What explain the change in the cash balance

4

Cost cutting

Cost cutting refers to measures implemented by a company to reduce its expenses and improve profitability.

5

Cash flow included:

Cash and cash equivalent

6

Cash equivalent must satisfy two criteria:

1-It must be readily convertible to a known amount of cash
2-Close to the maturity date so its market value is unaffected by interest rate change.

7

Operating activities (Cash Inflow)

-Customers’ cash sales
-Collection on credit sale
-Lawsuit settlement
-Borrowers for interest
-Dividend received
-Selling trading securities

8

Operating Activities (Cash Outflows)

-Salaries and wage
-to lenders for interest
-Charities
-Purchase trading securities
-to AP
-to Tax

9

Investing activities (Cash inflows)

-From selling equity investment
-From selling of (discount) loans
-From collecting principal on loans
-From selling long term productive assets
-From selling debt investment

10

Investing Activities (Cash outflows)

-to make loan to other
-to purchase debt investment
-to purchase long term productive assets
-to purchase equity investment

11

Financing Activities (Cash inflows)

-From contributions by owners
-From issuing its own equity stock
-From issuing bonds and notes
-From issuing short and long term debt

12

Financing Activities (Cash Outflow)

-To repay cash loans
-To pay withdrawals by owners
-To pay dividend to shareholders
-To purchase treasury stock

13

IAS require a statement of cash flow into three..

1-Operating
2-Investing
3-Financing

14

Noncash credits:

Refer to revenue amount reported on the income statement that are not collected in cash this period.