Identify the Three Ways to Classify Cash Flows

question 4

Essay

Identify the three ways to classify cash flows.

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Definitions:

Bonds

Long-term debt securities issued by corporations, governments, or other entities to finance operations or projects, which obligate the issuer to pay interest to bondholders.

Accrued Interest

The interest that has accumulated on a bond or loan since the last interest payment was made but has not yet been paid to the lender.

Long-Term Investment

Assets purchased by a company that are intended to be held for more than one year for the purpose of earning returns on the investment over time.