courses › Accounting

Where cash came from and went: operating, investing, and financing.

Pen and paper is fine · no calculator needed why?

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Opens at level 37.

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Builds on: Depreciation (not open yet)

skills · practice stats

From rounds of this course only: box, review and trial answers are left out. Once a skill has 40 tries, it compares your first 20 tries with your last 20.

• Operating, investing, or financing? par 10 s not tried yet

  worked example

  The business repays $14,000 of loan principal. Which kind of cash flow is this?

  1. Not a cash flow
  2. Investing
  3. Financing
  4. Operating

  Answer: Financing

  1. Operating = running the business; investing = buying or selling long-term assets; financing = money to and from lenders and owners.
  2. Repaying principal is money back to a lender: financing.

• Cash from operations par 25 s not tried yet

  worked example

  Net income is $19,000. Depreciation is $6,500. Inventory fell by $2,500 and accounts payable rose by $7,000. What is cash from operations? (Use a minus sign if negative.)

  Answer: $35,000.00

  1. Start with net income and add back depreciation (no cash used). Rising receivables or inventory use cash; rising payables keep it (and the reverse when they fall).
  2. $19,000 + $6,500 + $2,500 (inventory fell) + $7,000 (payables rose) = $35,000.

• Net change in cash par 21 s not tried yet

  worked example

  Cash from operations is $30,000, investing is −$4,000 (new equipment), and financing is −$5,000 (owner distributions). What is the net change in cash? (Use a minus sign if negative.)

  Answer: $21,000.00

  1. Add the three sections: $30,000 + (−$4,000) + (−$5,000) = $21,000.

rest ladder

Win 3 of your last 4 rounds and the course rests. A win is 90% right, within 2× the round's par. Pass the review when it comes back and the next rest is longer.

1. 1 day
2. 3 days
3. 7 days
4. 14 days
5. 30 days
6. 60 days
7. mastered · every 90 days

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