Untitled Quiz

Study Notes

Operating Activities: These are the everyday activities of the business, involving the production or sale of goods and services.
- Inflows: Cash received from customers, sales of goods or services, interest received on loans or investments.
- Outflows: Cash paid to suppliers, employees, operating expenses, rent, utilities.
Investing Activities: These are activities that involve the purchase or sale of long-term assets, such as property, plant, equipment, and investments.
- Inflows: Cash received from sale of fixed assets, collection of loans.
- Outflows: Cash paid for purchase of fixed assets
Financing Activities: These activities involve the raising of capital from investors and lenders, and the repayment of that capital.
- Inflows: Cash from issuing new shares or debt, borrowing money.
- Outflows: Cash paid for repayment of debt, dividends paid to shareholders.
Cash Equivalents: These are short-term, highly liquid investments that are readily convertible into cash, such as treasury bills and short-term government bonds.

Operating Activities:
- Cash Sales of goods-in-trade
- Cash Sales
- Cash received from Debtors
- Income tax paid
- Cash paid to Creditors/Supplier of goods
- Commission received
- Office Expenses
- Sale of Investment by finance Co. (This is a sale of a short-term investment, commonly classified as an operating activity)
Investing Activities:
- Purchase of Building
- Sale of Building
- Interest received on Investment
- Purchase of long-term Investment
Financing Activities:
- Dividend paid
- Interest paid on debentures
- Cash payment of long-term loans
- Finance Expenses (This can include interest paid and other finance costs)
- Redemption of Debentures
- Cash proceeds received from issuing shares at a premium.
Cash & Cash Equivalents:
- Investment in (Marketable) short-term Securities
- Bank Balance

Sale of Fixed Asset at a Loss: This results in a Cash Inflow. However, the inflow is less than the book value of the asset by the amount of the loss.
Declaration of Final Dividend: This has no effect on cash. The declaration of a dividend does not mean the cash is paid out.
Cash Deposited into Bank: This has no effect on cash. This is simply a change in the form of holding cash.
Sale of Marketable Securities for Cash: This results in a Cash Inflow. This is a conversion from Cash Equivalents to Cash.
Purchase of Marketable Securities for Cash: This results in a Cash Outflow. This is a conversion from Cash to Cash Equivalents.
Paying to Acquire Shares: This results in a Cash Outflow. This is an investment to increase the ownership interest in the Company.

Operating Activities:
- Cash paid to creditors
- Cash Receipts from Debtors
- Cash Sales
- Cash purchases of Goods
- Trading Commission Received
- Wages & Salaries paid
Investing Activities:
- Interest Received on Debentures held as Investment
- Brokerage paid on purchase of investments
Financing Activities:
- Interest paid on long-term borrowings