Chapter 13 - Chapter 13: Statement Of Cash Flows...

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Chapter 13: Statement Of Cash Flows CLASSIFICATIONS OF STATEMENT OF CASH FLOWS Cash equivalents : short term, highly liquid investment with original maturity less than three months; readily convertible to known amounts of cash; little risk that value will change if interest rates change due to quick maturity Cash Flows From Operating Activities Cash inflows and outflows directly related to earnings from normal operations (revenues and expenses reported on income statement) Direct method : reports components of cash flows from operating activities as gross receipts and gross payments Indirect method: adjusts net income to compute cash flows from operating activities Total number of cash flows from operating activities is same regardless of whether use direct or indirect Cash Flows From Investing Activities Cash inflows and outflows related to acquisition or sale of productive facilities and investments in securities of other companies; ex: sale of equipment, purchase of property Net cash inflow/outflow : difference between cash inflow and outflow Cash Flows From Financing Activities Cash inflows and outflows related to external sources of
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This note was uploaded on 04/07/2008 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Chapter 13 - Chapter 13: Statement Of Cash Flows...

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