Questions and Answers
What is the classification of repurchase of common stock?
What is the classification of cash received from customers?
What is the classification of payment of accounts payable?
What is the classification of retirement of bonds payable?
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What is the classification of purchase of equipment?
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What is the classification of purchase of inventory for cash?
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What is the classification of purchase of investments?
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What is the classification of disposal of equipment?
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What is the classification of payment for selling expense?
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What is the classification of collection of accounts receivable?
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What is the classification of cash sales?
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What is the classification of issuance of bonds payable?
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What is the classification of net income?
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What is the classification of paid cash dividends?
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What is the classification of issued common stock?
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What is the classification of issued bonds?
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What is the classification of redeemed bonds?
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What is the classification of sold long-term investments?
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What is the classification of purchased treasury stock?
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What is the classification of sold equipment?
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What is the classification of issued preferred stock?
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What is the classification of purchased buildings?
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What is the classification of purchased patents?
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Study Notes
Cash Flow Classifications
- Cash flows are categorized into three main activities: Operating, Investing, and Financing.
Operating Activities
- Cash received from customers: Funds generated from sales of goods or services.
- Payment of accounts payable: Cash outflows to settle outstanding obligations to suppliers.
- Purchase of inventory for cash: Cash spent on acquiring goods for resale.
- Payment for selling expenses: Funds used to cover expenses related to selling activities.
- Collection of accounts receivable: Cash received from customers for credit sales.
- Cash sales: Revenue collected immediately from customers at the point of sale.
- Net income: Total earnings reflecting operational success, influencing cash flows.
Investing Activities
- Purchase of equipment: Cash payments made for acquiring machinery or tools necessary for operations.
- Purchase of investments: Cash used for acquiring securities or assets intended for long-term gains.
- Disposal of equipment: Cash flows from selling old or unused machinery.
- Sold long-term investments: Cash inflow from the sale of investments held for an extended period.
- Purchased buildings: Investment in real estate for operational or rental purposes.
- Purchased patents: Cash used for acquiring intellectual property rights.
Financing Activities
- Repurchase of common stock: Cash outflow for buying back company shares from the market.
- Retirement of bonds payable: Cash paid to settle outstanding bonds.
- Issuance of bonds payable: Cash inflow from borrowing through bond sales.
- Paid cash dividends: Cash distributed to shareholders as a return on investment.
- Issued common stock: Cash raised by offering new shares to investors.
- Issued bonds: Cash receipts from placing bonds on the market as debt instruments.
- Redeemed bonds: Cash outflows related to paying off bonds before maturity.
- Purchased treasury stock: Cash spent on buying back the company's own shares.
- Issued preferred stock: Cash raised through the sale of preferred shares to investors.
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Description
Test your knowledge on different types of cash flows with these flashcards. From operations to financing and investing activities, this quiz will help you classify cash flow transactions effectively. Perfect for finance students or anyone looking to sharpen their understanding of cash flow classifications.
