Page 8 - FINAL CFA SLIDES DECEMBER 2018 DAY 7
P. 8
Session Unit 6:
22. Financial Reporting Mechanics, p.10
LOS 22.a: Describe how business activities are classified for financial reporting purposes, p.10
1. Operating activities are those undertaken in a firm’s ordinary course of business, such as
producing and selling goods and services.
2. Investing activities refer to buying or selling long-term assets, such as machinery or land.
3. Financing activities refer to issuing debt (borrowing money), redeeming debt (repaying money),
issuing common stock, repurchasing common stock, or paying cash dividends.
LOS 22.b: Explain the relationship of financial statement elements and accounts, and
classify accounts into the financial statement elements, p.11
Financial statement elements are the major classifications of assets, liabilities, owners’ equity,
revenues, and expenses.
Accounts are the specific records (from chart of accounts) within each element where various
transactions are entered.
