Sources and uses of cash, Cost Accounting

There are different activities undertaken through a business that prove to be either source or use of cash. These can be categorizes under three broad categories that are: investing activities, Financing activities and operating activities. A brief discussion of all of these categories is given below:

Operating  activities  comprise  cash  inflows  related  with  sales,  dividends  and interest  received  and  the  cash  outflows  related  with  operating  expenses comprising payments to  suppliers of  goods or  services, payments in the directions of wages, taxes and interest, etc. Increase or decrease in current assets, for illustration: receivables, inventory and also increase or decrease in current liabilities, for illustration: accounts payable, interest payable, wages payable, taxes payable also reflect operating activities.

Investing activities considered as to long life assets as land and building, plant and machinery and investments. Acquisitions of these assets involve cash outflow while their disposal means inflow of cash.

Financing activities encompass modifications in equity and preference capital, long term loans, debentures and same items. Issuance of equity, debenture and preference capital and also rising of long term loans imply cash inflow. Retirement of capital, redemption of debentures, bonus payments to shareholders, amortisation of long-term loans, conversely are related with cash outflow.

Posted Date: 4/9/2013 1:52:48 AM | Location : United States







Related Discussions:- Sources and uses of cash, Assignment Help, Ask Question on Sources and uses of cash, Get Answer, Expert's Help, Sources and uses of cash Discussions

Write discussion on Sources and uses of cash
Your posts are moderated
Related Questions
Nieland Industries had one patent recorded on its books as of January 1, 2014. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2014, Nieland

Reef Office Supplies is interested in estimating the cost involved in hiring new employees. The following information is available regarding the costs of operating the Human Resour

interaction with an expert/cost accountant to know the overhead absorbtion policies and procedure followed

Decision Making Cycle Steps in decision-making cycle are as: a) Clearly define the objective that is to be the focus of the decision. This is significant in order that the

explain any five qualities of accounting profession

You are considering starting a walk-in-clinic.  Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400

Polycorp Limited Steel Division is considering a proposal to purchase a new machine to manufacture a new product for a potential three year contract.  The new machine will cost $1

looking for a dissertation of cost allocation

product mix decisions with capacity constraint

A local hotel offers lodging services.  You can pick a name for the hotel(Home Sweet Home Hotel). Your team will develop a prototype reservation system to record client bookings fo