U3, AOS 2 - CFS Flashcards
What is the primary purpose of a cash flow statement?
To provide information about the cash inflows and outflows of a company during a specific period.
Which three main activities are reported in a cash flow statement?
Operating activities, investing activities, and financing activities.
True or False: Cash flow from operating activities includes cash received from customers.
True.
Fill in the blank: Cash flows from __________ activities include cash transactions for the purchase and sale of non-current assets
investing
What type of cash flow is generated from the sale of goods and services?
Cash flow from operating activities.
True or False: Financing activities include cash flows related to obtaining or repaying capital.
True.
What does a negative cash flow from operating activities indicate?
The company is spending more cash on operations than it is generating from sales.
Which section of the cash flow statement would you find cash paid for equipment?
Investing activities.
What is the formula to calculate net cash flow?
Net cash flow = Cash inflows - Cash outflows.
Fill in the blank: __________ activities involve cash transactions related to the company’s core business operations.
Operating
What is the typical layout order of a cash flow statement?
Operating activities, investing activities, financing activities.
True or False: Cash flows from investing activities can include loans owed to other entities.
True.
Which activity would be classified as an investing activity? A) Selling a building B) Paying salaries C) Selling shares
A) Selling a building.
What does cash flow from financing activities primarily reflect?
The cash inflows and outflows related to borrowing and repaying debt, and equity transactions.
Multiple Choice: Which of the following is considered a cash inflow? A) Cash received from customers B) Cash paid for rent C) Cash paid to suppliers
A) Cash received from customers.
True or False: Cash flows from operating activities can include cash receipts from interest, comission and dividends.
True.
What type of transaction is the payment of dividends classified under?
Financing activities.
Fill in the blank: Cash flows from __________ activities reflect the change in cash due to the purchase or sale of long-term assets.
investing
What does it mean if a company has a high cash flow from financing activities?
The company is likely raising significant capital through debt or equity.
True or False: The cash flow statement is one of the three main financial statements, along with the income statement and balance sheet.
True.
What does a cash flow statement help stakeholders assess?
The liquidity, financial flexibility, and overall cash management of the company.
