Accounting ACCT 2610 Lecture Notes - Lecture 12: Retained Earnings, Free Cash Flow, Accounts Payable
6 Dec 2016
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Classifications of the statement of cash flows: the definition of cash includes cash and cash equivalents, a cash equivalent is a short-term, highly liquid investment with an original maturity of less than three months. Readily convertible to known amounts of cash. So near to maturity that there is little risk that their value will change if interest rates change. Inflows: cash received from sale or disposal of property, plant, and equipment, and sale or maturity of investments in securities. Outflows: cash paid for purchase of property, plant, and equipment, and purchase of investments in securities. Financing activities: cash flows from financing activities are cash inflows and outflows related to external sources of financing (owners and creditors) for the enterprise. Inflows: cash received from borrowing on notes, mortgages, bonds, etc. from creditors and issuing stock to owners. Most current assets (other than short-term investments which are investing activities)
