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What represents an inflow of cash and therefore would be reported on the statement of cash flow?
Cash flows from (used in) operating activities Cash receipts from customersCash paid to suppliers and employeesCash generated from operationsInterest paidIncome taxes paidNet cash flows from operating activitiesCash flows from (used in) investing activities Proceeds from the sale of equipmentDividends receivedNet cash flows from investing activitiesCash flows from (used in) financing activities Dividends paidNet cash flows used in financing activities.Net increase in cash and cash equivalentsCash and cash equivalents, beginning of yearCash and cash equivalents, end of year
Which section is affected by the decision to use either the direct method or the indirect method to prepare the statement of cash flows?
The Operating Activities portion of the Statement of Cash Flows is affected by whether the direct or indirect method is used.
Why are companies required to prepare a statement of cash flows and what is its significance in financial reporting?
Companies are required to prepare a statement of cash flows to show how cash is generated and used in their operations. This statement is significant in financial reporting because it provides insights into a company's liquidity, operating activities, and ability to meet financial obligations.
What is cash flow statment?
A cash flow statement seeks to project or report cash flows after expenses that could be used for debt service or retained earnings.
Which one of the following items is not generally used in preparing a statement of cash flows?
Adjusted trial balance
When analyzing the changes on a spreadsheet used to prepare a statement of cash the cash flows from operating activities generally affect?
non- current assets
2 What questions about cash are answered by the statement of cash flows?
In a nutshell, statement of cash flow provides detailed summary of where cash came from and how it was used. It helps investors, creditors, and others assess an entity's ability to generate future cash flows, to pay dividends and meet obligations; the reasons for the difference between net income and net cash provided (used) by operating activities; the cash investing and financing transactions during the period.
Which statements could be useful in explaning how much cash a company has used or generated during an accounting period and why?
The Statement of Cash Flows contains this information.
What is statement of cash flows and what types of question does it answers?
it explains SOURCES of funds and where in the balance sheet the funds were USED
What three categories of cash flow are used in the statement of cash flows?
1 - Cash flow from operating activities 2 - Cash flow from investing activities 3 - Cash flow from financing activities
The primary purpose of the statement of cash flows is to provide information about?
The primary purpose of the statement of cash flows is to provide information about a company's cash inflows and outflows over a specific period. It helps stakeholders understand how cash is generated and used in operating, investing, and financing activities. This statement is crucial for assessing the company's liquidity, financial flexibility, and overall cash management. By detailing cash transactions, it complements the balance sheet and income statement, offering a comprehensive view of financial health.
Why the cash flows from operating activities are reported separately on a Statement of Cash Flows?
Cash flows from operating activities are reported separately on the Statement of Cash Flows to provide a clear view of the cash generated or used by a company's core business operations. This distinction helps investors and analysts assess the company's ability to generate sustainable cash flow from its primary activities, which is crucial for evaluating its operational efficiency and profitability. By isolating these cash flows, stakeholders can better understand how well the company manages its day-to-day operations without being influenced by financing or investing activities.
