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Canada (158,081)
Accounting (526)
ACC 100 (209)
Chapter 2

Chapter 2 - Cash Flow Statement Description

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Ryerson University
ACC 100
Brad Mac Master

Cash Flow Statement  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. There are three types of business activity: ♦ Financing activities - to start or expand a business, the owner or owners quite often need cash from outside sources. Activities include:  Borrowing money from creditors which creates a liability - source of cash • bank loan • debt securities (bonds)  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  Purchasing short or long term investments (bonds or shares of other corporations) - use of cash  Selling short or long term investments -
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