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Presentation of a statement of cash flows. The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities. An entity presents its cash flows from operating, investing and financing activities in a manner which is most appropriate to its business. Classification
Feb 22, 2024 · When a statement of cash flows is prepared, these three types of cash flows are reported under separate sections, which are the operating activities section, the investing activities section, and the financing activities section.
This article considers the statement of cash flows of which it assumes no prior knowledge. It is relevant to the FA (Financial Accounting) and FR (Financial Reporting) exams. The article will explain how to calculate cash flows and where those cash flows are presented in the statement of cash flows.
Aug 15, 2024 · Selling equipment that was used for operations and administrative purposes has two effects on the cash flow statement. The proceeds from the sale are a cash inflow in the investing section. The gain or loss on the sale is a reconciling item between net income and cash flow in the operating section.
The cash flow statement reports the cash generated and spent during a specific period of time (e.g., a month, quarter, or year). The statement of cash flows acts as a bridge between the income statement and balance sheet by showing how cash moved in and out of the business.
1 Briefly describe the evolution of the statement of cash flows. 2 State the purposes of the statement of cash flows. 3 Describe the types of cash flows shown in each of the statement’s three sections. 4 Prepare a statement of cash flows using the indirect method, the direct method, and the T-account approach.
Jun 22, 2023 · The impact these items have on cash is reflected in the investing activities section of the statement of cash flows by showing a $27,000 cash outflow for the purchase of equipment and a $12,000 cash inflow from the sale of equipment.
