Statement of 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”