Chapter 12 - Cash Flows Flashcards Preview

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Flashcards in Chapter 12 - Cash Flows Deck (19):
0

Cash Equivalent

A short term, highly liquid investment with an original maturity of less than 3 months

1

CFI cash outflow items

cash paid for:
1) purchase of property, plant and equipment
2) purchases of investments and securites

2

CFI cash inflow items

cash received from:
1) Sale or disposal of property, plant and equipment
2) Sale or maturity of investments in securites

3

CFF cash inflow items

cash paid for:
1) borrowing on notes, mortgages, bonds. etc. from creditors
2) issuing stock to owners

4

CFF cash outflow items

cash paid for:
1) repayment of principal to creditors (EXCLUDING INTEREST)
2) repurchasing stock from owners
3) dividends to owners

5

The difference between cash inflows and outflows for investing activities is called:

NCFI: net cash inflow (outflow) from investing activities:

6

CFO cash inflow items

cash received from:
1) customers
2) dividends and interest on investments

7

CFO cash outflow items

cash paid for:
1) purchase of services (electricity, etc.) and goods for resale
2) salaries and wages
3) income taxes
4) interest on liabilities

8

The difference between cash inflows and outflows for operating activities is called

NCFO: net cash inflow (outflow) from operating activites

9

The difference between cash inflows and outflows for financing activities is called

NCFF: net cash inflow (outflow) from financing activites

10

What cash flow type do cash inflows from dividends and interest on investments fall under?

CFO

11

What cash flow type to cash inflows from sales of investments fall under?

CFI

12

What cash flow type do cash outflows from payment of interest on a loan fall under?

CFO

13

What cash flow type to cash inflows from borrowing on notes, mortgages, bonds, etc. from creditors fall under?

CFF

14

The net cash flows from CFO, CFI and CFF must equal what?

The net increase (or decrease) in cash

15

How is the basic accounting equation modified to calculate cash flows

delta cash assets = delta liabilities + delta SE - delta non-cash assets

(non-cash assets are subtracted from assets and moved to other side of equation)

16

when preparing a cash flow statement and marking each change in balance sheet account value from the previous year to the current, what items fall under "O"

1. Most current assets
2. Most current liabilities (not amounts owed to investors and financial institutions - these are marked with "F")
3. Retained Earnings

Examples:
Accounts recv.
Inventories
Accounts payable
Accrued exp.

17

when preparing a cash flow statement and marking each change in balance sheet account value from the previous year to the current, what items fall under "I"

Examples:
Short Term Investments
Property, Plant, and Equipment, net

18

when preparing a cash flow statement and marking each change in balance sheet account value from the previous year to the current, what items fall under "F"

Examples:
Long-Term Debt
Contributed Capital (includes common stock and additional paid-in capital)
Retained Earnings (only those relating to dividends declared and paid)