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Questions and Answers
What type of activity is cash received from customers for the sale of goods or services?
What type of activity is cash received from customers for the sale of goods or services?
What activity involves the purchase of investment securities, such as stocks and bonds?
What activity involves the purchase of investment securities, such as stocks and bonds?
Investing activities - out
What type of activity is cash borrowed through mortgages?
What type of activity is cash borrowed through mortgages?
Financing activity - in
Cash received from interest and dividends from investments is classified as?
Cash received from interest and dividends from investments is classified as?
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What does cash paid as payment on long-term debt represent?
What does cash paid as payment on long-term debt represent?
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Cash paid for the purchase of inventory is an example of?
Cash paid for the purchase of inventory is an example of?
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Cash paid for salaries/wages is classified as?
Cash paid for salaries/wages is classified as?
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Purchase of long-lived assets used in the business is classified under?
Purchase of long-lived assets used in the business is classified under?
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Cash paid for operating expenses is an example of?
Cash paid for operating expenses is an example of?
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Collection of a non-trade receivable is classified under?
Collection of a non-trade receivable is classified under?
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Cash paid for interest on debt is characterized as?
Cash paid for interest on debt is characterized as?
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Dividends received fall under which type of activity?
Dividends received fall under which type of activity?
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The sale of long-lived assets used in the business is classified as?
The sale of long-lived assets used in the business is classified as?
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Cash paid for income taxes is considered as?
Cash paid for income taxes is considered as?
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The sale of machinery is classified as?
The sale of machinery is classified as?
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What type of activity is the sale of land?
What type of activity is the sale of land?
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Cash borrowed through loans represents which type of activity?
Cash borrowed through loans represents which type of activity?
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What is the classification for payment of note payable?
What is the classification for payment of note payable?
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What type of activity is the issuance of common stock?
What type of activity is the issuance of common stock?
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Study Notes
Statement of Cash Flow Classifications
- Cash received from customers for goods or services is categorized as an operating activity inflow.
- Purchasing investment securities (stocks and bonds), excluding cash equivalents or trading securities, is classified under investing activities outflow.
- Borrowing cash through mortgages qualifies as a financing activity inflow.
- Cash obtained from interest and dividends on investments falls under operating activity inflow.
- Payments made on long-term debt are recorded as financing activity outflow.
- Cash disbursements for inventory purchases are designated as operating activity outflow.
- Salary and wage payments are also classified as operating activity outflows.
- Acquiring long-lived assets necessary for business operations results in an investing activity outflow.
- Cash paid for operating expenses is recognized as operating activity outflow.
- Collecting non-trade receivables, excluding interest, is categorized as an investing activity inflow.
- When inventory is purchased, it is classified as an operating activity inflow.
- Payments for interest on debt are recorded as operating activity outflow.
- Interest on notes payable is also considered an operating activity outflow.
- General and administrative expenses paid are classified under operating activity outflow.
- Selling long-lived assets used in the business is categorized as an investing activity inflow.
- Cash payments made for income taxes fall under operating activity outflow.
- Received dividends are classified as operating activity inflow.
- Selling machinery is recognized as an investing activity inflow.
- Dividends paid to shareholders are categorized as financing activity outflow.
- Cash received from selling land is also classified as an investing activity inflow.
- Interest received is an operating activity inflow.
- Selling investment securities other than cash equivalents or trading securities is categorized under investing activity inflow.
- Repaying creditors amounts due, excluding trade payables, is recognized as financing activity outflow.
- Cash payments for interest are considered operating activity outflow.
- Payment on notes payable is classified as financing activity outflow.
- Payments to owners in dividends fall under financing activity outflow.
- Borrowing cash via loans is classified as financing activity inflow.
- Under IFRS, dividends paid are classified as operating activity outflow.
- Dividends received under IFRS are recognized as investing activity inflow.
- Interest paid under IFRS is categorized as financing activity outflow.
- Interest received under IFRS is classified as investing activity inflow.
- Loans made to other entities are recognized as investing activities outflow.
- Cash received from owners through shares sold is categorized as financing activity inflow.
- Borrowing cash via notes is classified as financing activity inflow.
- Collection from note receivables is recognized as an investing activity inflow.
- Cash borrowed through bonds is classified as financing activity inflow.
- Cash payments to owners for reacquiring previously sold shares are categorized as financing activity outflow.
- Selling common stock is recognized as financing activity inflow.
- Paying cash dividends is classified as financing activity outflow.
- Purchasing property, plant, and equipment is categorized as investing activity outflow.
- Collections from customers are classified as operating activity inflow.
- Payment of interest on notes payable is recognized as operating activity outflow.
- Issuance of common stock is categorized as financing activity inflow.
- Collecting interest on notes receivable is classified as operating activity inflow.
- Paying the principal on notes payable is recognized as financing activity outflow.
- Issuing bonds payable in exchange for land and buildings is categorized as a non-cash investing activity.
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Test your knowledge on the classifications of cash flow activities with these flashcards. Each card provides terminology related to operating, investing, and financing activities. Perfect for finance students or professionals looking to reinforce their understanding of cash flow statements.
