Chapter 12 The Statement of Cash Flows
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Statement of cash flows
The financial statement that summarizes an entity's cash receipts and cash payments during the period from operating, investing,and financing activities.
The statement of cash flows reports the changes in cash over a period of time and, most importantly, explains those changes.
Summarizes the cash on hand and the balances in other assets, liabilities, and owner's equity accounts, providing a snapshot at a specific point in time.
The income statement summarizes performance on an accrual basis
An item readily convertible to a known amount of cash with a maturity to the investor of three months or less.
Activities concerned with the acquisition and sale of products and services.
Activities concerned with the acquisition and disposal of long term assets.
Activities concerned with the raising and repaying of funds in the form of debt and equity.
For preparing the Operating Activities section of the statement of cash flows, the approach in which cash receipts and cash payments are reported.
For preparing the Operating Activities section of the statement of cash flows, the approach in which net income is reconciled to net cash flow from operations.
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