Class 9_21 & 22_10 - Ch 13

Class 9_21 & 22_10 - Ch 13 - Agenda Questions?...

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Page 1 Questions? Textbook – Chapter 13 Statement of Cash Flows – my favorite Agenda
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Page 2 What is the Statement of Cash Flows? It tells us how much and why cash is increasing or decreasing. Cash is so important to every business that it has its own report. “Cash is King!” Accrual basis of accounting – we don’t care when cash is paid or received when preparing the Income Statement. All we care about is putting revenues (using the four requirements for revenue recognition) and expenses (matching principle and periodic expenses) in the period earned or incurred. Transaction Practice
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Page 3 The 3 sections of the Statement of Cash Flows 1. Cash Flows from Operating Activities Cash flows that relate to revenues and expenses reported on the Income Statement. Everything Income Statement Examples: In Out Cash from customers Inventory (will eventually end up in COGS) Dividends on investments Salaries Interest on investments Income taxes Interest on loans Electricity 2. Cash Flows from Investing Activities
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Class 9_21 & 22_10 - Ch 13 - Agenda Questions?...

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