Statement of Cash Flows

Question 1

FAR

What items are included in operating activities on the Statement of Cash Flows?

Answer 1

Flows through the income statement.

Cash received from Customers- Interest & Dividends- Trading Securities

Cash paid to Vendors- Suppliers- employees- Interest- Taxes- Trading Securities

Question 2

FAR

What items are included in investing activities on a Statement of Cash Flows?

Answer 2

Flows related to the acquisition and disposal of LT assets and investments.

Cash received: Sale of PP&E- Sale of Investments- Loan Principle

Cash paid: Loans- Acquisitions- PP&E purchases- AFS or HTM Securities- Taxes- Trading Securities

Question 3

FAR

What items are included in Financing Activities in a Statement of Cash Flows?

Answer 3

Flows related to liabilities and owners equity.

Cash received: Issuance of Stock- Issuance of Debt

Cash paid: Dividends, retirement of debt and equity securities

Question 4

FAR

What is the direct method for a Statement of Cash Flows?

Answer 4

Starts with Income from Continuing Operations

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

If used- the Indirect Method must also be shown

Question 5

FAR

What is the Indirect Method for a Statement of Cash Flows?

Answer 5

Starts with Net Income

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses