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Financial Accounting 7th ed Chapter 13 Glossary
For UoP XACC 291
7
Accounting
Undergraduate 1
03/13/2014

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Cards

Term
Direct method
Definition
A method of determining net cash provided by operating activities by adjusting each item in the income statement from the accrual basis to the cash basis and which shows operating cash receipts and payments. (pp. 619, 642)
Term
Financing activities
Definition
Cash flow activities that include (a) obtaining cash from issuing debt and repaying the amounts borrowed and (b) obtaining cash from stockholders, repurchasing shares, and paying dividends. (p. 615)
Term
Free cash flow
Definition
Cash provided by operating activities adjusted for capital expenditures and dividends paid. (p. 630)
Term
Indirect method
Definition
A method of preparing a statement of cash flows in which net income is adjusted for items that do not affect cash, to determine net cash provided by operating activities. (pp. 618, 621)
Term
Investing activities
Definition
Cash flow activities that include (a) purchasing and disposing of investments and property, plant, and equipment using cash and (b) lending money and collecting the loans. (p. 615)
Term
Operating activities
Definition
Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into the determination of net income. (p. 615)
Term
Statement of cash flows
Definition
A basic financial statement that provides information about the cash receipts, cash payments, and net change in cash during a period, resulting from operating, investing, and financing activities. (p. 614)
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