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Why is unrealized gain and losses not included in net income?
Unrealized gains and losses are not cash involving transactions that's why while making cash flow from operating activities, net income is adjusted for these kind of non-cash items.
When a cash dividend is declared it would affect the balance sheet but not the statement of cash flows?
dividend will affect the cash flow when actual cash is paid and not at the time of declaration of dividend.
Depreciation affect cash flow?
There is no affect of depreciation on cash flow that's why in indirect method of cash flow net income is adjusted for depreciation to calculate cash flow from operating activities.
Describe how errors can rise when accepting cash payments at the till and explain how these can result in losses?
Errors in accepting cash payments at the till can arise from miscounting cash, giving incorrect change, or failing to accurately record transactions. These mistakes can lead to discrepancies in the cash drawer, resulting in financial losses for the business. Additionally, if cash is mishandled or misplaced, it can lead to theft or unaccounted funds, further increasing the potential for losses. Regular training and robust cash handling procedures are essential to minimize such errors.
How is provision for doubtful debts treated in the cash budget?
In a cash budget, provision for doubtful debts is typically not directly included, as cash budgets focus on actual cash inflows and outflows. Instead, it serves as an adjustment in the income statement for financial reporting purposes, reflecting expected credit losses. While the provision itself does not affect cash flow, it indicates potential reductions in future cash inflows from accounts receivable. Thus, businesses may consider it when forecasting cash collections to ensure they maintain adequate liquidity.
Where do you put realized gains or losses in the cash flow statement?
operating activities
Will an adjusting entry ever affect the asset account called cash?
Adjusting entries never affect cash. The entry is entered to make sure that the books match what the cash balance says.
What is the journal entry for paid for postage?
postage a/c dr to cash a/c (debit all expenses and losses)
What is a cash flow hedge?
a cash flow hedge ia an instrument designated as hedging the exposure to variability in expected future cash flows attributed to a particular rick. gain/losses on the effective portion of a cash flow hedge are deferred and are reported as a component of other comprehansive income (outside earning) until the cash flow associated with the hedged item are realized. gains/losses on the ineffective portion of a cash flow hedge are reported in current income.
How does depretion affect cash flows How do sunk costs affect the detrmination of cash flows. What is the project initial out lay?
Depreciation does affect cash flow indirectly. Using different methods of depreciating an asset will impact the depreciation expense.Even though depreciation expense is non-cash transaction, it indirectly affect cash flow through the income tax effect. Having higher depreciation expense can lower your taxable income, thereby reducing your income tax expense, which will change your cash outflow for taxes.
Which one affect of cash is cash dividend or account payable or depreciation or write of?
Cash dividend affects the cash and remaining items does not have any effect on cash like depreciation or accounts payable.
Does capital reserve affect cash flow statement?
NO
