Statement of Cash Flows Flashcards
What items are included in operating activities on the Statement of Cash Flows?
Cash received from Customers- Interest & Dividends- Trading Securities
Cash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities
What items are included in investing activities on a Statement of Cash Flows?
Cash received: Sale of PP&E- Sale of Investments- Loan Principle
Cash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities
What items are included in Financing Activities in a Statement of Cash Flows?
Cash received: Issuance of Stock- Issuance of Debt
Cash paid: Dividends
What is the direct method for a Statement of Cash Flows?
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
What is the Indirect Method for a Statement of Cash Flows?
Starts with Net Income
Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses
Investments under the equity method
must be deducted from net income to determine net cash flows from operations.
interest payments are classified as….
operating expense
Cash received from sale of available-for-sale-securities goes to what section:
Investing activity
Cash dividends received from available-for-sale securities goes to what section:
Operating activity
Noncash items that were subtracted in determining income must be added back in determining net cash flows from operations. Each of these noncash items is a charge against income but does not decrease cash.
Items to be added back include depreciation, amortization of intangibles, amortization of discount on bonds payable, bad debt expense, and any increase in the deferred tax liability. Note each of these items is charged against income but does not decrease cash.
