Cash Flows

Question 1

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

Answer 1

Cash received from Customers, Interest & Dividends, Trading Securities

Cash paid to Vendors, Suppliers, Interest, Taxes, Trading Securities

Question 2

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

Answer 2

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

Cash paid: Loans, Acquisitions, AFS or HTM Securities, Taxes, Trading Securities

Question 3

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

Answer 3

Cash received: Issuance of Stock, Issuance of Debt

Cash paid: Dividends

Question 4

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

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