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Accounting Ch.11
Key Terms.
Question | Answer |
---|---|
Activities that increase or decrease long term assets. Buying or selling assets that last longer than one year. | Investing Activities. |
Activities related to the issuance of, and payment of, long term debt, the issuance of stock, and the payment of dividends. | Financing Activities. |
A financial statement that shows all the sources and all of the uses of cash for an accounting period. | Statement of Cash flows. |
The statement of cash flow shows what four things? | 1. The beginning cash balance 2. the source of cash. 3. the uses of cash. 4 how these add up and become ending balance. |
Sources of cash: | * operating the business * selling long term assets for cash * long term borrowing of cash or having stockholders invest. |
Uses of Cash: | *Operating the business * buying long term assets with cash * repaying long term loans. paying dividends, or repurchasing stock |
Operating activities | accrual basis net income or loss, plus noncash expenses and losses, minus noncash revenues and gains. |
Format of the operating activities section of the statement of cash flows . It starts with net income and reconciles to net cash provided by operating activities. | indirect method. |
Format of operating activities section of statement of cash flows. It lists the cash receipts and cash payments resulting from companys day to day operations. | Direct Method. |
the amount of cash available from operations after paying for invenstments in long term assets. | free cash flow. |
A measurement of the amount of time a company's cash is tied up in its operations. | Cash conversion cycle. |