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Stocks 303: Understanding the Statement of Cash Flow

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1.
In which part of the statement of cash flow would you find debt issues recorded?
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Cash flows from financing activities. Debts are listed in this section.
2.
Creditors use statements of cash flow to keep track of their borrowers abilities to repay loans.
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True. These statements keep them informed about where their borrowers money is going.
3.
The statement of cash flow records inflows and outflows of cash as soon as income is earned or expenses incurred.
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False. It records income and expenses regardless of when they were earned or incurred.
4.
The ABC Company has just bought 1 million shares of the XYZ Company. It will record this purchase as a cash outflow.
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True. Because money left ABC to pay for the securities, the purchase is a cash outflow.
5.
Financing activities include stock and bond investments.
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True. The financing section of the statement of cash flow records a companys investments.
6.
The operating activities section of the statement of cash flow covers cash flows associated with _______.
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Production and sales. It concerns itself with the cash flows of making and selling the companys products or services.