Daffodil International University
Faculties and Departments => Accounting – The Language of Business => Business Administration => Business & Entrepreneurship => Financial Accounting => Topic started by: fahmidaemran on December 08, 2018, 12:03:12 PM
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Three Types of Cash Flow Activities
Operating activities include cash activities related to net income. For example, cash generated from the sale of goods (revenue) and cash paid for merchandise (expense) are operating activities because revenues and expenses are included in net income.
Investing activities include cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. For example, cash generated from the sale of land and cash paid for an investment in another company are included in this category. (Note that interest received from loans is included in operating activities.)
Financing activities include cash activities related to noncurrent liabilities and owners’ equity. Noncurrent liabilities and owners’ equity items include (1) the principal amount of long-term debt, (2) stock sales and repurchases, and (3) dividend payments. (Note that interest paid on long-term debt is included in operating activities.)
Source: https://saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.html
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Its important for accounting.
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informative sharing