BU397 Chapter Notes - Chapter 22: Interest Expense, Effective Interest Rate, Accrual
Document Summary
The info may help users assess: liquidity and solvency. Entity"s ability to generate future cash flows and its needs for cash resources: the amounts, timing, and uncertainty of future cash flows, reasons why net income and net cash flow from operating activities differ. Readily convertible to known amounts of cash. Subject to an insignificant risk of change value: made up of non-equity investments that are acquired with short maturities. Provides info about: cash receipts (cash inflows) during the year, uses of cash (cash outflows) during the year. Operating activities: cash flows resulting from the primary revenue producing activities in the business such as. Payments to cra for tax: cash flow provided by operating activities necessary for long term sustainability of the business. To take advantage of new investment opportunities. To pay dividends without seeking external financing. Investing activities: the acquisition and disposal of long term assets and long term investments, includes. Cash receipts from the disposal of assets mentioned above.
