Classification of Cash Flows Flashcards
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Questions and Answers

What are Cash inflows from the sale of goods and services called?

  • Operating Activities (correct)
  • Investing Activities
  • Financing Activities
  • None of the above
  • What are Cash inflows from interest received called?

  • Operating Activities (correct)
  • Investing Activities
  • Financing Activities
  • None of the above
  • What are Cash inflows from dividends received classified as?

  • Operating Activities (correct)
  • Investing Activities
  • Financing Activities
  • None of the above
  • What are Cash outflows for the purchase of merchandise inventory called?

    <p>Operating Activities</p> Signup and view all the answers

    What are Cash outflows for salaries and wages paid classified as?

    <p>Operating Activities</p> Signup and view all the answers

    What are Cash outflows for interest paid categorized as?

    <p>Operating Activities</p> Signup and view all the answers

    What are Cash inflows from the sale of property, plant and equipment called?

    <p>Investing Activities</p> Signup and view all the answers

    What are Cash inflows from the sale of debt or equity investments classified as?

    <p>Investing Activities</p> Signup and view all the answers

    What are Cash inflows from the collection of loans from others called?

    <p>Investing Activities</p> Signup and view all the answers

    What are Cash outflows for the purchase of property, plant and equipment classified as?

    <p>Investing Activities</p> Signup and view all the answers

    What are Cash inflows from issuing capital stock called?

    <p>Financing Activities</p> Signup and view all the answers

    What are Cash inflows from issuing long-term debt classified as?

    <p>Financing Activities</p> Signup and view all the answers

    What are Cash outflows for the purchase of treasury stock called?

    <p>Financing Activities</p> Signup and view all the answers

    What are Cash outflows for payment of cash dividends classified as?

    <p>Financing Activities</p> Signup and view all the answers

    Study Notes

    Operating Activities

    • Represents core business transactions generating cash.
    • Cash inflows are from sales of goods and services.
    • Includes cash received from interest and dividends.
    • Cash outflows include purchases of merchandise inventory.
    • Cash outflows also consist of salaries and wages payments and interest paid.

    Investing Activities

    • Focuses on transactions involving long-term assets.
    • Cash inflows arise from selling property, plant, and equipment.
    • Includes cash received from selling debt or equity investments.
    • Collecting on loans made to others results in inflows.
    • Cash outflows come from purchasing property, plant, and equipment.
    • Expenditures include purchasing debt or equity investments and making loans to others.

    Financing Activities

    • Concerned with transactions that affect the capital structure.
    • Cash inflows from issuing capital stock enhance funding.
    • Long-term debt issuance, such as bonds and mortgages, generates cash inflows.
    • Short-term and long-term borrowing contributes to cash inflow.
    • Cash outflows occur with the buyback of treasury stock.
    • Payments of debt principal are classified as cash outflows.
    • Cash dividends payments to shareholders also signify outflows.

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    Description

    This quiz consists of flashcards that help you understand the classification of cash flows, specifically focusing on operating activities. Each card provides a definition of different cash inflows and outflows related to operating activities, enhancing your knowledge of cash flow management.

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