Explain what types of transactions are reported in the Operating, Investing, and Financing activity sections of...

Explain what types of transactions are reported in the Operating, Investing, and Financing activity sections of the statement of cash flows.

Expert Solution

Cash flow statement is prepared to known actual physical cash outflow and inflow into the entity during the period.

It is divided into operating, investing, financial activities.

Operating activities are the principal revenue generating activitie of an entity. Operating activities are the transactions are events which enter into the profit or loss determination of an entity.

Ex: cash received from sale of goods or rendering of services, rent, royalty,commission received or paid, cash payments made to suppliers etc..

Investing activities are the one arising from cash paid for fixed assets additions, disposal, cash paid for purchase of shares, securities, cash loans and advances received or given, cash paid for entering in to future contracts etc

Financing activities are the activities made for rising funds. Cash received from issue of shares, debentures, notes, bonds, borrowings and any cash repayments made.

ekkarill92 answered 1 year ago

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