Ch 12 Flashcards
Cash equivalent
Item readily convertible to known amount with 3 or
Less months
Statement of cash flows
Financial statement that summarizes an entity’s cash
Receipts and cash payments during the period from
Operating, investing and financing activities
What does the term “cash” include on the statement of cash flows?
Cash and cash equivalents
Operating activities, 3 examples?
Activities concerned with acquisition and
sale of products and services
Ex. Operating activities include Manufacturers purchase raw materials, retailers purchase inventory, sales person earns commission
Investing activities
Activities concerned with acquisition and disposal
Of Longterm assets
Financing activities
Activities concerned with raising and repaying
Of funds in form of debt and equity
Cash flows from operating activities are the ….
Cash effects of transactions that help determine net income
Cash flows form operating activities usually relate to an increase or decrease in?
Current assets and current liabilities
Investing activities normally relate to?
Longterm assets on balance sheet
Financing activities usually relate to either?
Long term liabilities or stockholders equity
