Podcast
Questions and Answers
Which of the following activities is included in Operating Activities?
Which of the following activities is included in Operating Activities?
- Repayment of borrowings
- Issuance of shares
- Purchase of non-current assets
- Total sales for the period (correct)
Cash Flow Statements are not required by AASB 107.
Cash Flow Statements are not required by AASB 107.
False (B)
What are the three categories of cash flow activities?
What are the three categories of cash flow activities?
Operating Activities, Investing Activities, Financing Activities
The cash receipts from customers are derived from the formula: Accounts Receivable (Beginning) + Total Sales for the Period - Accounts Receivable (End) = ______.
The cash receipts from customers are derived from the formula: Accounts Receivable (Beginning) + Total Sales for the Period - Accounts Receivable (End) = ______.
Match the cash flow activities with their descriptions:
Match the cash flow activities with their descriptions:
What should be ignored when preparing the Cash Flow Statement?
What should be ignored when preparing the Cash Flow Statement?
Cash flow from investing activities includes cash paid to employees.
Cash flow from investing activities includes cash paid to employees.
What is the first step to produce a Cash Flow Statement?
What is the first step to produce a Cash Flow Statement?
In financing activities, cash flow is derived from changes in ______ and borrowings.
In financing activities, cash flow is derived from changes in ______ and borrowings.
Which of the following is NOT part of cash flows for taxes?
Which of the following is NOT part of cash flows for taxes?
Which of the following represents the main inflows in Cash flows from Operating Activities?
Which of the following represents the main inflows in Cash flows from Operating Activities?
What is a primary outflow in the Cash flows from Investing Activities?
What is a primary outflow in the Cash flows from Investing Activities?
Payments to Suppliers are considered a primary inflow in Cash flows from Operating Activities.
Payments to Suppliers are considered a primary inflow in Cash flows from Operating Activities.
Financing Activities include Proceeds from borrowings and Repayment of Loans.
Financing Activities include Proceeds from borrowings and Repayment of Loans.
What are the main inflows in Cash flows from Financing Activities?
What are the main inflows in Cash flows from Financing Activities?
The main inflows in Cash flows from Investing Activities are proceeds from the sale of ______.
The main inflows in Cash flows from Investing Activities are proceeds from the sale of ______.
Match the following Cash Flow categories with their main components:
Match the following Cash Flow categories with their main components:
Which of the following is a main outflow in Cash flows from Financing Activities?
Which of the following is a main outflow in Cash flows from Financing Activities?
What are the primary outflows in Cash flows from Operating Activities?
What are the primary outflows in Cash flows from Operating Activities?
Cash flows from Investing Activities mainly include cash movements related to Current Assets.
Cash flows from Investing Activities mainly include cash movements related to Current Assets.
What is a primary inflow in Cash flows from Operating Activities?
What is a primary inflow in Cash flows from Operating Activities?
Payments to Suppliers are considered a primary inflow in Cash flows from Operating Activities.
Payments to Suppliers are considered a primary inflow in Cash flows from Operating Activities.
What constitutes the main outflow in Cash flows from Investing Activities?
What constitutes the main outflow in Cash flows from Investing Activities?
Cash movements in Financing Activities focus on Non-Current ______ and Owner's Equity.
Cash movements in Financing Activities focus on Non-Current ______ and Owner's Equity.
Which of the following options represents the main inflows in Cash flows from Investing Activities?
Which of the following options represents the main inflows in Cash flows from Investing Activities?
Financing Activities include Proceeds from Share Issues.
Financing Activities include Proceeds from Share Issues.
List two main outflows in Cash flows from Financing Activities.
List two main outflows in Cash flows from Financing Activities.
The main outflows in Cash flows from Operating Activities include Payments to Suppliers, Employees, ______, and Taxation.
The main outflows in Cash flows from Operating Activities include Payments to Suppliers, Employees, ______, and Taxation.
Match the following cash flow categories with their definitions:
Match the following cash flow categories with their definitions:
Which of the following is NOT a main inflow in Cash flows from Operating Activities?
Which of the following is NOT a main inflow in Cash flows from Operating Activities?
What is the primary purpose of a Cash Flow Statement?
What is the primary purpose of a Cash Flow Statement?
Investing activities primarily involve cash transactions related to day-to-day operations.
Investing activities primarily involve cash transactions related to day-to-day operations.
What are cash receipts from customers calculated by?
What are cash receipts from customers calculated by?
Financing Activities include changes in equity and ______.
Financing Activities include changes in equity and ______.
Match the following cash flow activities with their descriptions:
Match the following cash flow activities with their descriptions:
Which of the following is NOT included in cash flows for dividends received?
Which of the following is NOT included in cash flows for dividends received?
Changes in non-current asset balances help determine cash flows from financing activities.
Changes in non-current asset balances help determine cash flows from financing activities.
Identify what must be ignored when preparing the Cash Flow Statement.
Identify what must be ignored when preparing the Cash Flow Statement.
Cash paid to suppliers is calculated using Accounts Payable (Beginning) + Total Purchases for the Period - Accounts Payable (End) = ______.
Cash paid to suppliers is calculated using Accounts Payable (Beginning) + Total Purchases for the Period - Accounts Payable (End) = ______.
Which activity is generally included in investing activities?
Which activity is generally included in investing activities?
Study Notes
Overview of Cash Flow Statement
- AASB 107 mandates cash flow statements in addition to income statements, balance sheets, and equity changes statements.
- Cash flows are categorized into three main activities: Operating, Investing, and Financing.
Categories of Cash Flow Activities
- Operating Activities: Involves principal revenue generation through routine business operations.
- Investing Activities: Concerns acquisition and disposal of long-term assets, including non-current assets.
- Financing Activities: Relates to changes in equity and borrowings affecting owners and debt management.
Preparing a Cash Flow Statement
- Use the previous and current balance sheets along with the current income statement as sources for information.
Steps to Produce a Cash Flow Statement
-
Cash Receipts from Customers:
- Calculate using beginning accounts receivable, total sales, and ending accounts receivable.
-
Cash Paid to Suppliers:
- Determine using beginning accounts payable, total purchases, and ending accounts payable.
-
Cash Paid to Employees:
- Take employee expenses from the income statement and adjust for prepaids and accruals.
-
Cash Paid for Other Expenses:
- Identify other expenses from the income statement and adjust for prepaids and accruals; exclude non-cash expenses like depreciation.
-
Cash Flows for Dividends, Interest, and Tax:
- Identify and sum cash involved in interest received/paid and income tax paid.
-
Cash for Non-Current Assets:
- Assess changes in non-current asset balances from the start to the end of the period to determine cash flow.
-
Financing Cash Flows:
- Evaluate changes in equity and borrowings, including cash from share issues, loans, repayments, and dividend payments.
Importance of the Cash Flow Statement
- Highlights detailed cash movement, showing the shift in bank cash balances (e.g., from 100,000to100,000 to 100,000to150,000).
- Cash movements are explained through inflows and outflows across the three activity categories.
Cash Flows from Operating Activities
- Focuses on cash movements reflected in the income statement and current assets/liabilities.
- Major inflows stem from customer receipts; significant outflows consist of supplier payments, employee payments, interest, and taxes.
Cash Flows from Investing Activities
- Examines cash transactions related to non-current assets.
- Main cash inflows are from asset sales, while cash outflows relate to purchasing assets, like equipment.
Cash Flows from Financing Activities
- Concentrates on cash movements involving non-current liabilities and owner’s equity.
- Inflows primarily arise from borrowing proceeds and share issues, with outflows manifesting as loan repayments and dividends.
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Description
This quiz examines the Cash Flow Statement as outlined by AASB 107, which requires businesses to present cash flows alongside income statements, balance sheets, and changes in equity. It covers the three main categories of cash flow activities: operating, investing, and financing activities.
