11 Questions
What do investing activities involve?
The acquisition and disposal of long-term assets and investments not classified as cash equivalents
What is the primary purpose of cash flow from operating activities?
To preserve operating competence without relying on external financing
What is the purpose of cash flow from investing activities?
To make investments in long-term assets to generate profit in the future
Which of the following is an example of cash flow from operating activities?
Cash payment to employees in the form of salary or wages
What do financing activities involve?
Changes in the scope and arrangement of the proprietors' capital and borrowings
What is cash flow information frequently used as a pointer of?
Amount, timing, and certainty of upcoming cash flows
What does a cash flow statement describe?
Inflows and outflows of cash and cash equivalents
What do cash and cash equivalents include?
Readily convertible, extremely liquid investments
What is the effect of a transaction that increases cash?
Inflow of cash
What are operating activities?
Foremost revenue constructing activities of the business
What is cash flow a summary of?
Modification in cash position among the dates of two balance sheets and revenue statements
Test your understanding of cash flow statements, their importance, and how they relate to profitability and net cash flow. Learn about the inflows and outflows of cash and cash equivalents in a business. Assess your knowledge of cash flow statements and their uses.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
