Final Exam Review Ch. 12 Flashcards
(13 cards)
What is the purpose of the Statement of Cash Flows?
To report cash receipts and cash payments for a period
What are the ways that the Statement of Cash Flows are separated?
- Operating activities
- Investing Activities
- Financing Activities
What are considered to be cash?
Cash and cash equivalents
Define Cash Equivalents.
They are
1. Readily convertible to a known cash amount
2. Close to maturity less than or equal to 90 days
What are sources of cash flows?
When receipts in a category exceed payments
What are uses of cash flows?
When payments in a category exceed receipts
What are Operating Activities?
Transactions and events that affect net income.
What are classified as Operating Cash Flows?
Current Assets and Current Liabilities
What are Investing Activities?
Transactions and events from the purchase and sell of long-term assets and investments, and lending and collecting money for notes receivable.
What are classified as Investing Cash Flows?
Long-term investments in company; long-term assets
What are Financing Activities?
Transactions and events that affect long-term Liabilities and Equity.
What are classified as Financing Activities?
Long-Term Liabilities and Equity
Receiving cash dividends from investments in another company is a _________ activity.
operating
