0
Why does the purchase of an item classified as a cash equivalent not appear on the statement of cash flows as an investing activity?
A cash equivalent is a short-term investment in marketable securities that can be sold very quickly (three days or less in an active exchange); its purpose is to provide some level of return on excess cash that would otherwise be sitting in a bank account. To that extent that the cash equivalent can be thought of as operating cash on hand, and not as an investment. If, on the other hand, a company bought marketable securities to hold for investment purposes over the long-term that would be investing. Given that the purchase of cash equivalents is related to operating activities it is accounted for in cash flows from operating activities. The investment in marketable securities "held for investment" would be treated as an investing activity.
What else can I help you with?
Is borrowing money from a bank an investing activity?
yes
Buying and selling productive resources with long lives?
investing activity
What is the total amount of cash credit from unsettled activity in the financial statement?
The total amount of cash credit from unsettled activity in the financial statement is the sum of money received but not yet processed or finalized.
What is a cashflow budget?
Budgeted cash flow statement is the estimated cash flow statement for planning purpose before the actual activity starts
How can I view my bank statement online?
To view your bank statement online, log in to your online banking account using your username and password. Look for the option to view statements or account activity, and select the statement you want to view. You can usually download or print the statement for your records.
Objectives of cash flow statement?
Provide information about the operating ,investing and financing activity of an entity during a period
Is a stock dividend reported on a statement of cash flows why or why not?
No, it is not a cash flow, and it also is not a significant fiancing or investing activity.
What transactions would be considered an investing activity on a Statement of Cash Flows?
selling a depreciable asset for cash at a loss
Is received cash dividens form investing a operating activity?
Dividend received is an investing activity and not an operating activity.
Is purchase of a computer investing cash flow?
Purchase of computer is investing activity, investing activity included when invests in some other company.
When preparing a statement of cash flows on the indirect method each of the following should be classified as an operating activity cash flow except?
When preparing a statement of cash flows using the indirect method, cash flows from operating activities primarily include cash transactions related to the core business operations, such as receipts from customers and payments to suppliers. However, cash flows related to the acquisition or sale of long-term assets, such as property, plant, and equipment, are classified as investing activities, not operating activities. Therefore, any cash flows associated with investing or financing activities should not be included in operating activities on the statement of cash flows.
Land costing $138,463 was sold for $175,514 cash. The gain on the sale was reported on the income statement as other income. On the statement of clash flows, what amount should be reported as an investing activity from the sale of land?
37,051
Where would the purchase on noncurrent assets be reported in the statement of cash flows?
Purchase of fixed asset is shown under cash flows from investing activities as an outflow of cash because purchase of assets is an investing activity and it causes reduction of cash flow.
How are Investments in stock reported on the cash flow statement?
Investment in stocks is shown under cash flows from investing activities and this activity reduces the cash or it is said to be a cash outflow.
Would cash received from stock sold be classified as a financing activity on the statement of cash flows?
Yes, Cash received from issuance of new capital is cash flow from financing activities in cash flow statement.
Where do gain of sale of land go on an income statement?
Loss on sale of land is added back to net income in operating activities and sale of land is shown under investing activity as a reduction in amount.
Is money paid as interest a investing cash flow?
Interest paid is an operating activity if paid on short term borrowing or long term borrowing and not investing activity
