Daffodil International University
Faculties and Departments => Accounting – The Language of Business => Business Administration => Business & Entrepreneurship => Financial Accounting => Topic started by: MD. ABDUR ROUF on September 17, 2018, 03:18:34 PM
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Financing Activities:
Financing activities include those transactions and events that affect long-term liabilities and equity. Examples are (i) obtaining cash from issuing debt and repaying the amounts borrowed and (ii) receiving cash from or distributing cash to owners. Incurring or repaying either short-term or long-term debt would result in a corresponding cash inflow or outflow. As a general rule, borrowing from creditors or repaying creditors as well as transactions with the company’s owners are classified as financing activities. For example- when a company borrows money by issuing a bond, the transaction is classified as financing activities.
Changes in the current liabilities that are debts to lenders rather than obligations to suppliers, employees, or the government.
Changes in non-current liabilities those are not included in net income.
Changes in capital stock accounts
Dividends.
Cash Inflows:
From contributions by owners
From issuing bonds and notes
From issuing short and long-term debt
From issuing its own equity stock
Cash Outflows:
To pay cash dividends to shareholders
To purchase treasury stock
To repay cash loans
To pay withdrawals by owners
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Great!