BU127 Chapter Notes - Chapter 5: Accounts Receivable, Accounts Payable, Financial Statement
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BU127 Full Course Notes
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The statement of cash flows explains how the cash balance at the beginning of the period changed to another cash balance at the end of the period. Cash equivalents are short-term, highly liquid investments that are both: readily convertible to known amounts of cash, and, less than three months to their maturity and subject to an insignificant risk of changes in value. Cash flows from operating activities are the cash inflows and cash outflows that directly relate to revenue and expenses from normal operations. The difference between net cash inflows and outflows is called the net cash inflow (outflow) from operating activities. Cash flows from investing activities are cash inflows and outflows related to the acquisition or sale of long-term productive assets and investments. The difference between these cash inflows and outflows is called net cash inflow (outflow) from operating activities.
