
Concept Introduction: The concept of
Cash flows Statement: It indicates the company’s cash receipts and payments during a period. It is classified in three activities:
Cash flows from operating activities: It shows the net cash flows generated from the primary operations of the company such as cash sales, royalties, etc.
Cash flows from investing activities: It shows the net cash flows from the investments such as purchase of building, interest on securities, etc.
Cash flows from financing activities: It shows the net effects that were caused by transactions with owners or lenders such as payment of dividend, raising capital, etc.
To Classify: The following transactions into operating, investing or financing activities.

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Chapter 1 Solutions
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