ACC151Chapt12

ACC151Chapt12 - Chapter 12: Cash Flow Statement Designed to...

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Chapter 12: Cash Flow Statement Designed to tell investors where cash went and what cash went in PURPOSE OF THE STATEMENT OF CASH FLOWS How does a company obtain its cash? Where does a company spend its cash? What explains the change in the change in cash balance? How did the business fund its operations? – as an investor Did the business make any dividend payments? – as a stockholder Did the business borrow any funds or repay any loans – as a creditor Does the business have sufficient cash to pay CASH IS MADE UP OF 1) Cash Equivalents Short-term, highly liquid investments Readily convertible into cash Sufficiently close to maturity so that market value is unaffected by interest rate changes 2) Currency OPERATING Anything necessary for operation Inflows: receipts from customers, cash dividends received, interest from borrowers Outflows (anything necessary to create revenue): salaries and wages, payments to suppliers, taxes and fines, interest paid to lenders) INVESTING Anything dealing with property, plant, or equipment
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This note was uploaded on 02/22/2012 for the course ACC 151 taught by Professor Franklin during the Fall '08 term at Syracuse.

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ACC151Chapt12 - Chapter 12: Cash Flow Statement Designed to...

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