Accounting investing activities examples

Capital expenditures such as property, plant and equipment. Money obtained from the selling of property, plant and equipment. Acquisition or merger of two businesses 4. Funds obtained from the sale of other businesses 5. Purchasing of marketable securities such as bonds, stocks, etc. Sale of marketable securities Positive and Negative Cash Flow Positive cash flow means the inflow of cash is more than the outflow of cash, while a negative cash flow indicates that the inflow of cash is less than the outflow of cash.

Following are some of the examples of positive and negative cash flow statements. Purchasing of fixed assets result in negative cash flow. Purchasing of any kind of bonds, debentures, stock and any such instrument results in negative cash flow.

Sale or leasing of fixed assets results in positive cash flow. Sale of securities results in positive cash flow. Examples of Cash Inflow and Outflow Following are some examples of cash inflows: 1. Long-term assets usually consist of fixed assets like vehicles, buildings, and machinery.

When a company purchases a new vehicle with cash , the cash outflows are listed in the investing section. Likewise, if a company sells one of its vehicles, the cash proceeds are listed in this section as well. Investments are a little more complicated than the long-term assets because it depends on the source of the investment. For example, cash paid for short-term investments like trading securities and cash equivalents are included in this section.

Principle payments on third party notes are also included.

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Previous Next Investing Activities Investing activities comprise the second section of the cash flow statement where it is representing the cash inflow and outflow of the business. This inflow and outflow of cash can be obtained by investing in non-current assets such as PPE Plant, Property and Equipment , investment in securities and from the sale of assets and securities, acquisition of other businesses.

Cash flow from investing activities deals with the cash inflow and outflow related to sale and purchase of assets, loan amount received from customers or the one taken from the suppliers and any other payments that are related to any kind of merger and acquisitions.

Investing Activities in Accounting The following activities are involved in the investing activities: 1. Capital expenditures such as property, plant and equipment. Money obtained from the selling of property, plant and equipment. Acquisition or merger of two businesses 4. Funds obtained from the sale of other businesses 5. Purchasing of marketable securities such as bonds, stocks, etc.

Sale of marketable securities Positive and Negative Cash Flow Positive cash flow means the inflow of cash is more than the outflow of cash, while a negative cash flow indicates that the inflow of cash is less than the outflow of cash. Following are some of the examples of positive and negative cash flow statements.

Purchasing of fixed assets result in negative cash flow. Accordingly, you will see an investing activities section in the cash flow financial statement. The most common transactions are purchases and sales. The data needed to complete this section of the cash flow report would be an Income statement, comparative Balance sheets, and some additional financial data.

Cash Flows from Investing Activities Cash flow from investing activities is often negative since it contains mainly the costs of implementing the initiative, as well as business expansion and modernization. It is usually covered by income received from the main activity of the enterprise sale of goods or services. Outflows consist of the following items: capital investments research, development, and construction work ; purchase and installation of the necessary equipment; acquisition of intangible assets copyrights, licenses, permits, rights to use something, for example, a land plot ; commissioning activities; liquidation activities environmental protection measures, etc.

Also, a number of non-capitalized expenses are considered to be outflows costs for external infrastructure facilities, taxes on the land plot used for the project. If we are talking about construction, then investment investments should always be linked to the construction schedule.

In accounting, costs associated with investing activities are classified by type of expense. Examples of cash inflows typical for investing activities include: Income received from the sale of enterprise assets surplus equipment or raw materials, unused buildings or premises.