Statement of Cash Flows Flashcards
What section of the cash flow statement does the principal portion of a loan cash payment belong in?
Investing Activities section
What section of that cash flow statement does the interest portion of a loan cash payment belong in?
Operating Activities section
What types of cash receipts flow through the operating section of the cash flow statement?
Cash received from:
- Customers
- Interest & Dividends
- Trading Securities
What types of cash payments flow through the operating section of the cash flow statement?
Cash paid to:
- Vendors
- Suppliers
- Interest
- Taxes from operating activities
- Asset retirement obligation settlements
What types of cash receipts flow through the investing section of the cash flow statement?
Cash received from:
- Sale of PP&E
- Sale of investments
- Loan Principal
What types of cash payments flow through the investing section of the cash flow statement?
Cash paid:
- Loans
- Acquisitions
- Equity or HTM Securities
- Taxes from Investing Activities
What types of cash receipts flow through the financing section of the cash flow statement?
Cash received:
- Issuance of Stock
- Issuance of Debt
What types of cash payments flow through the financing section of the cash flow statement?
Cash paid:
- Dividends
- Distributions to owners
- Debt
- Debt Issue Costs
- Debt re-payment
- Debt prepayment
What is the indirect method?
The indirect method starts with Net Income and makes adjustments for noncash entries such as depreciation and amortization.
What is the direct method?
The direct method starts with Income from Continuing Operations and adjusts up/down for changes in accounts such as A/R, A/P, Inventory, and non-cash revenues, expenses, gains and losses.
If the direct method is used, does the indirect method have to be shown?
Yes, if the direct method is used, we must show the indirect method as well.
