Unit 4: Statement of Cash Flows Flashcards
PAS 7 provides that interest paid and received shall be classified primarily as operating cash flows. Alternatively, interest paid may be classified as a/an _______ cash flow.
Financing cash flow, because it is a cost of obtaining financial resources.
PAS 7 provides that interest paid and received shall be classified primarily as operating cash flows. Alternatively, interest received may be classified as a/an _______ cash flow.
Investing cash flow, because it is a return on investment.
For a financial institution, interest paid and received are usually classified as _____ cash flows.
operating
IAS 7 provides that dividend received shall be classified as _______ cash flow because it enters into the determination of NI.
Alternatively, this may be classified as ________.
operating; an investing cash flow, because it is a return on investment.
IAS 7 provides that dividend paid shall be classified as _____ cash flow because it is a cost of obtaining financial resources.
Alternatively, this may be classified as _______.
financing; an operating cash flow, as it assists users to determine the ability of the entity to pay dividends out of operating cash flows.
Cash payments to acquire and cash receipts from sales of entity or debt instruments of other entities and interests in joint ventures is an example of cash flows from ______ activities.
Investing activities.
The following are examples of cash flows from ______ activities:
Cash receipts from issuing shares or other equity instruments (e.g., ordinary and preference shares).
Financing activities.
Cash payments to owners to acquire or redeem the enterprise’s shares (e.g., payment for treasury shares) – these are classified under what type of cash flow?
Financing.
Cash receipts from issuing loans, notes, bonds, mortgages, debentures and other short or long-term borrowings - these transactions are classified as what cash flow?
Financing.
Cash payments for amounts borrowed are classified as what type of cash flow?
Financing.
Cash payments by a lessee for the reduction of the outstanding principal lease liability are classified as what type of cash flow?
Financing.
Cash advances and loans to other parties (other than advances and loans made by financial institutions) are grouped under what type of cash flow?
Investing.
Cash payments for and receipts from future contract, forward contract, option contract and swap contract are classified as what type of cash flow?
Investing.
Payments for long-term liabilities and bank loans are what type of cash flow?
Financing.
Cash receipts and payments for securities held for trading are what type of cash flow?
Operating.
