Concept #1: Introduction to the Statement of Cash Flows

Practice: The purchase of equipment and the sale of equipment would be shown on the Statement of Cash Flows as:

Example #1: Statement of Cash Flows

Additional Problems
Which cash flow activity is related to borrowing money on a long-term basis? A) operating activities B) investing activities C) financing activities D) investing and financing activities
Which of the following is not a cash outflow for a company? A. income taxes B. interest payments C. property taxes D. dividends E. depreciation F. all of the above are examples of cash outflows
For each transaction listed below, indicate where it would be presented on the statement of cash flows. 1. proceeds from the sale of common stock 2. cash paid for advertising 3. proceeds from the sale of land 4. cash received as interest from loans that were made to customers 5. purchase of a copyright for cash 6. collection of accounts receivable from sales to customers
The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income. c. provide information about the cash receipts and cash payments during a period. d. facilitate banking relationships.
Which of the following transactions would not create a cash flow from operating activities? A. Collecting cash from a customer. B. Paying cash to a supplier. C. Paying cash to stockholders for dividends. D. Paying cash for a utility bill.
Which of the following describes the operations section of a cash flow statement? A. It provides information about how operations have been financed. B. It provides information pertaining to dividend payments to stockholders. C. It provides information with respect to a company's ability to self-generate cash to support its business activities. D. It provides the net increase or decrease in cash during the period.
A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common stock (no market price was quoted). How should this be reported in connection with the statement of cash flows? A. Report $12,000 as inflow and outflow of cash. B. Report $12,000 as an inflow of cash. C. Do not report it as it is not a cash transaction. D. Report in the schedule of significant noncash transactions.