Question

The format of financial statement varies from country to country. The FASB and IASB propose that financial statements in the future be organized using the same format currently used in the statement of cash flows––operating, investing, and financing activities. This would greatly change the current format used to prepare the income statement and the balance sheet.

Required:
1. Explain the differences among operating, investing, and financing activities. You might want to refer back to the first section in Chapter 11 on the statement of cash flows.
2. Provide at least one example of an account reported in the income statement that would be classified as
(a) An operating activity,
(b) An investing activity,
(c) A financing activity.
3. Provide at least one example of an account reported in the balance sheet that would be classified as
(a) An operating activity,
(b) An investing activity,
(c) A financing activity.



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  • CreatedJuly 15, 2014
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