ACC 100 Lecture Notes - Lecture 6: Income Statement, Making Money, Cash Flow Statement

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Reports the cash effects of a company"s operations for a period of time. Shows cash increases and decreases from operating, investing, and financing activities. Indicates net increase or decrease in cash balance during the period as well as ending cash balance. Financing activities - to start or expand a business, the owner or owners quite often need cash from outside sources. Borrowing money from creditors which creates a liability - source of cash. Repayment of money borrowed - use of cash. Selling ownership interests in the corporation to shareholders - source of cash. Payment of dividends - use of cash. Investing activities - obtaining resources or assets needed to operate the business (i. e. , equipment, buildings, etc. ) and investing idle cash (i. e. short- term or long-term investments). Purchasing assets (property, plant and equipment) - use of cash. Selling old assets (property, plant and equipment) - source of cash.

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