A cash flow statement shows inflow and outflow of cash and cash equivalent. It provides useful information about cash receipts and cash payment. Cash inflow means cash receipts from operating,investing and financing activities. Cash outflow means cash payments for operating,investing,financing activities.
A cash flow statement shows inflow and outflow of cash and cash equivalent. It provides useful information about cash receipts and cash payment. Cash inflow means cash receipts from operating,investing and financing activities. Cash outflow means cash payments for operating,investing,financing activities.
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A cash flow statement shows inflow and outflow of cash and cash equivalent. It provides useful information about cash receipts and cash payment. Cash inflow means cash receipts from operating,investing and financing activities. Cash outflow means cash payments for operating,investing,financing activities.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online from Scribd
A cash flow statement shows inflow and outflow of cash and cash equivalent from various activities of a company during a particular year.this statement provide useful information about cash receipts and cash payment from operating ,investing and financial activities of enterprise. Explain in brief the term cash? The term cash consist of cash in hand and demand deposit with banks. Cash equivalent The term cash equivalent consist of very short term and highly liquid investments which have 3 months or less maturity period from the date of purchase.
Explain in brief the term cash flow?
Cash flow means the movement of cash and cash equivalent in and out of the enterprise. cash inflow means cash receipts from operating ,investing and financing activities. cash outflow means cash payments for operating ,investing and financing activities. State the objectives of the cash flow statement? 1. To provide useful information about cash flow of the enterprise during a particular period. 2. To provide useful information for accessing ability of the firm in generating cash and cash equivalent. State the benefits or advantages of the cash flow statement? 1. A cash flow statement is used along with other statement to evaluate changes in that assets and financial structure of an enterprise. 2. A cash flow statement is useful to assess the firms ability in generating cash and cash equivalent. 3. A cash flow statement is useful in developing model for comparing the present value of future cash flow of different enterprise.
Explain in brief the term operation activities
Operating activities are the principle revenue producing activities of an enterprise they indicate the extend to which the operations of an enterprise generate sufficient cash to meet operating expenses ,they include sales ,purchases direct expenses, office expenses ,selling expenses etc.
Give examples of cash inflow from operating activities
1. Cash receipts from customers for sale of goods and services 2. Cash receipts from royalties and the fees . 3. Cash receipts from commission and discount. Give examples of cash outflows from operating activities? 1. Cash payment to suppliers for purchase of goods and services. 2. Cash payments to employees for salaries and allowances. 3. Cash payment of rent ,insurance ,income tax, sale tax etc. Explain in brief the term investing activities? These are the activities related to the purchase and sales of fixed assets and long term investment they represent the extent to which expenses is made by an enterprise to generate future income and cash flow. They include purchase and sales of fixed asset of long term investment. Give examples of cash inflow from investing activities? 1. cash receipts from the sale of tangible fixed assets like building, plant and machinery etc. 2. Cash receipts from repayments of the loans and advances. 3. Cash receipts from sale of shares , debentures bonds ets. 4. Cash receipts from interest of investment and dividend on shares. Give examples of cash outflow from investing activities? 1. Cash payment to purchase tangible fixed assets like land and building ,plant and machinery etc. 2. Cash payment to purchase of shares and debentures, bonds 3. Cash payments from loans and advances given to the third party. 4. Cash payment to purchase of intangible fixed assets like goodwill, patents, trademarks etc.
Explain in brief the term financing activities?
They are the activities related to long term fund or capital of an enterprise they result in the change in the size and composition of the owners capital and borrowing of an enterprise. They consist of activities related to raising and repayment of owners funds and borrowed capital. Cash inflow from financing activities 1. Cash receipts from the issue of equity shares and preference shares. 2. Cash receipts from the issue of debentures,bonds. 3. Cash receipts from loans and overdraft
Cash outflow from financing activities
1. Cash repayments of equity shares and preference shares 2. Cash repayment of debenture and bond 3. Cash repayment of loans and overdraft 4. Cash repayment of interest and dividend. Classify the following activities as investing operating and financing activities 1. Purchase of machinery 2. Cash sales 3. Proceeds from sale of old machinery. 4. Trading commission receipt 5. Proceeds from issue of equity shares 6. Proceeds from issue of debentures 7. Cash receipts from debtors 8. Redemption of preference share 9. Purchase of investment 10. Proceed from sale of investment 11. Purchase of goodwill 12. Cash paid to suppliers 13. Wages and salaries paid 14. Interim dividend paid on equity shares 15. Interest received on debenture 16. Office and administrative expenses paid 17. Bank overdraft 18. Underwriting commission paid 19. Brokerage paid on purchase on investment 20. Manufacturing expenses paid 21. Rent paid