CHAPTER 5-a - can be converted easily to cash with little...

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CHAPTER 5 5-1 No. All public companies report it because the statement of cash flows is a required statement with a required format. 5-2 A cash flow statement shows the sources of changes in cash balances and: a) aids in predicting future cash flows and evaluating how management's decisions generate and use of cash; b) aids in determining a company's ability to pay dividends and interest and to pay debts when due; c) aids in understanding and identifying changes in the mix of productive assets. 5-3 Cash equivalents are highly-liquid, short-term investments that
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Unformatted text preview: can be converted easily to cash with little delay. Examples include money market funds and treasury bills. 5-4 Operating activities, investing activities, and financing activities are the three major types of activities summarized in the statement of cash flows. 5-5 Major operating activities include: Collections Payments from customers (for sales) to suppliers (for inventory) from investees (interest & dividends) to employees (for wages) to creditors (interest) to government (taxes)...
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This note was uploaded on 04/11/2008 for the course ACCT 151 taught by Professor Largay during the Spring '07 term at Lehigh University .

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