Accounting 3 - Financial Statements - Cashflow Statement

Question 1

Cash flow statement

Answer 1

A summary of all cash transactions during a given period.

Question 2

Indirect method

Answer 2

Describes how cash has moved in and out of a company, focusing on operating, financing, and investing activities.

Question 3

Operating activities

Answer 3

Include day-to-day transactions such as buying and selling inventory, paying vendors and employees, etc.

Question 4

Investing activities

Answer 4

Investment in capital expenditures as well as the sale and purchase of other companies (or the stocks and bonds of other companies).

Question 5

Financing activities

Answer 5

Activities between the company and its investors and lenders. It is a cash inflow when money is received from investors but an outflow when cash is paid to investors.

Question 6

Capital expenditures

Answer 6

Acquisitions of long-term assets that will enhance a business. These tend to depreciate over time.

Question 7

Debt issuance

Answer 7

Occurs when a company borrows money from lenders. This is an inflow.

Question 8

Debt repayment

Answer 8

An outflow that occurs when a company pays back a debt.

Question 9

Dividend

Answer 9

A cash payment (outflow) to shareholders.

Question 10

Share repurchase

Answer 10

A cash outflow when a company buys back shares from its own stockholders.