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Stocks 303: Understanding the Statement of Cash Flow

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1.
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.
2.
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.
3.
An income statement records only cash received.
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False. It records revenue even when the revenue has not been received.
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.
Equipment expenditures are included in which section of the statement of cash flow?
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Investing activities. Equipment is considered an investment.
6.
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.