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Wiki User
∙ 13y ago
Wiki User
∙ 11y agoassess the liquidity of a business
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What represents an inflow of cash and therefore would be reported on the statement of cash flow?
Cash flows from (used in) operating activities Cash receipts from customersCash paid to suppliers and employeesCash generated from operationsInterest paidIncome taxes paidNet cash flows from operating activitiesCash flows from (used in) investing activities Proceeds from the sale of equipmentDividends receivedNet cash flows from investing activitiesCash flows from (used in) financing activities Dividends paidNet cash flows used in financing activities.Net increase in cash and cash equivalentsCash and cash equivalents, beginning of yearCash and cash equivalents, end of year
Which section is affected by the decision to use either the direct method or the indirect method to prepare the statement of cash flows?
The Operating Activities portion of the Statement of Cash Flows is affected by whether the direct or indirect method is used.
What is cash flow statment?
A cash flow statement seeks to project or report cash flows after expenses that could be used for debt service or retained earnings.
Which one of the following items is not generally used in preparing a statement of cash flows?
Adjusted trial balance
When analyzing the changes on a spreadsheet used to prepare a statement of cash the cash flows from operating activities generally affect?
non- current assets
Which statements could be useful in explaning how much cash a company has used or generated during an accounting period and why?
The Statement of Cash Flows contains this information.
What is statement of cash flows and what types of question does it answers?
it explains SOURCES of funds and where in the balance sheet the funds were USED
2 What questions about cash are answered by the statement of cash flows?
In a nutshell, statement of cash flow provides detailed summary of where cash came from and how it was used. It helps investors, creditors, and others assess an entity's ability to generate future cash flows, to pay dividends and meet obligations; the reasons for the difference between net income and net cash provided (used) by operating activities; the cash investing and financing transactions during the period.
What three categories of cash flow are used in the statement of cash flows?
1 - Cash flow from operating activities 2 - Cash flow from investing activities 3 - Cash flow from financing activities
Does using the direct method of preparing a cash flow statement provide a higher cash flow result than the indirect method?
Actual cash flow remains the same no matter what method is used it is just the presentation of statement and method of calculated cash flows and it does not affect amount of cash flow
Where does cash appear on financial statement?
No, Cash does not go on the Income Statement. The Income Statement is just that a statement to show the company's Net Profit or Net Loss. The accounts used on the Income Statement are Revenue (Income) and Expenses. For example, if we are a company and we have sales of $5,000 for the period ending (usually monthly), this goes in our Revenue Account (Income) and is listed on the Income Statement. We then List all expense, these include such expenses as Rent Expense, Income Tax Expense, Wage Expense (salaries), and so on. our Revenue minus these expenses gives us our Net Profit (Net Loss if expense are more than Revenue) The cash account does not affect the Income Statement. Cash is listed on all Trial Balance Sheets, The Balance Sheet. It is not used on either the Income Statement or Statement of Retained Earnings.
What are the limitations of a statement of cash flow?
Cash flow statements just as the Income Statement and Balance Sheet are prepared using historical information which is in the past. It therefore does not provide complete information to assess the future cash flows of an entity. Cash flow statements just as the Income Statement and Balance Sheet are prepared using historical information which is in the past. It therefore does not provide complete information to assess the future cash flows of an entity.
