Business Administration 1220E Chapter Notes - Chapter 3: Cash Flow, Asset, Accounts Payable

• School: Western University
• Department: Business Administration
• Course: Business Administration 1220E
• Professor: Raza Khan

Document Summary

The statement of cash flows dentifies the specific activities that provided or consumed cash during the specific period of time. Displays results of policies on dividends, financing methods, and contribution of cash flow derived from operations. Displays increases in working capital items that relate to liquidity. Bridges the gap between the accounting world and the real world shows the financial health of a company and the fluctuations in cash balance. When assets increase: you purchase assets but you are using cash. When assets decrease: assets are sold and depleted, and you receive cash. When liabilities decrease: your liabilities decrease and you use your cash to pay it off. When liabilities increase: you receive cash and are now liable to pay others back. Three categories are classified within the statement of cash flows: operations: describes how normal (day to day) business operations have affected the flow of cash.