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Stocks 303: Understanding the Statement of Cash Flow

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1.
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.
2.
Equipment expenditures are included in which section of the statement of cash flow?
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Investing activities. Equipment is considered an investment.
3.
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.
4.
The investing activities section of the statement of cash flow records the buying of machinery.
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True. Buying equipment is considered an investment activity by a corporation.
5.
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.
6.
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.