Statement Of Cash Flows

Question 1

What is the format of a cash flow statement?

Answer 1

Operating activities
Investing activities
Financing activities

Question 2

What are operating activities?

Answer 2

Activities involving day-to-day business

(E.g. paying employees, customer transactions, etc)

(Activities that build to provide us net income & changes to current assets & current liabilities)

Question 3

What are investing activities?

Answer 3

The company buying & selling non current assets

Question 4

What are financing activities

Answer 4

Where the company’s long term funding comes from (e.g. borrowing from the bank, shareholders’ equity)

Question 5

Which accounts do operating activities impact?

Answer 5

Net income, current assets, current liabilities

Question 6

Which accounts do investing activities impact?

Answer 6

Long term assets

Question 7

Which accounts do financing activities impact?

Answer 7

Long term liabilities, shareholders’ equity

Question 8

What are the two methods for the statement of cash flows?

Answer 8

Direct & indirect method

Question 9

Which method is preferred for the statement of cash flows?

Answer 9

Direct