Classification of activities in cash flow statement Following are the four classifications of cash flows activities that are related to the cash flow statement: Operating Activities: In the operating activities section of the cash flow statement, cash inflows from the revenue of the business operations are reported, while cash outflows for the expenses for the business operations are reported. Investing activities: In the investing activities section of the cash flow statement, increase and decrease in the long-term assets representing outflow and inflow of cash on account of investing activities is reported. Financing activities: In the financing activities section of the cash flow, increase and decrease in the long-term liabilities and equities representing inflow and outflow of cash on account of financing activities are reported. Non-cash activities : The transactions where cash is not involved are treated as non-cash activities and are not reported in the statement of cash flow. To Identify: The given transactions in the form of journal entries as operating, investing, financing, or non-cash activities in the statement of cash flow.

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 14.17E

To determine

Classification of activities in cash flow statement

Following are the four classifications of cash flows activities that are related to the cash flow statement:

Operating Activities: In the operating activities section of the cash flow statement, cash inflows from the revenue of the business operations are reported, while cash outflows for the expenses for the business operations are reported.

Investing activities: In the investing activities section of the cash flow statement, increase and decrease in the long-term assets representing outflow and inflow of cash on account of investing activities is reported.

Financing activities: In the financing activities section of the cash flow, increase and decrease in the long-term liabilities and equities representing inflow and outflow of cash on account of financing activities are reported.

Non-cash activities: The transactions where cash is not involved are treated as non-cash activities and are not reported in the statement of cash flow.

To Identify: The given transactions in the form of journal entries as operating, investing, financing, or non-cash activities in the statement of cash flow.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

General Accounting Question give true answer

A company performed $25,905 of services and received $9,000 in cash with the remaining amount to be paid in 60 days with no interest. What would the effect of this transaction be on the company's current month- end accounting equation? A. $25,905 increase in Assets; No effect on Liabilities; $25,905 increase in Stockholders' Equity. B. $16,905 increase in Assets; No effect on Liabilities; $16,905 increase in Stockholders' Equity. C. $25,905 increase in Assets; $25,905 increase in Liabilities; No effect on Stockholders' Equity. D. $9,000 increase in Assets; $16,905 decrease in Liabilities; $25,905 increase in Stockholders' Equity.

Give correct option for following data of this general accounting question