ACG 2021 Lecture Notes - Lecture 24: Retained Earnings, Financial Accounting Standards Board, Treasury Stock
20 Apr 2018
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Document Summary
From the income statement: net income, depreciation, depletion and amortization expense, gains and losses on sales of long-term asset. Increase or decrease in each current asset (other than cash) Cash flows from investing activities: transactions that affect long-term assets, plant assets, investments, and notes receivables. Increases in these accounts represent purchases: decreases to cash, decreases to these accounts represent sales, increases to cash. Purchases of long-term assets collections of notes receivable. Cash flows from financing activities: transactions affecting liabilities and stockholders" equity, notes payable, bonds payable, long-term debt, common stock, paid-in capital in excess of par, and retained earnings, most of the data comes from the balance sheet. Increases are offset by increases in cash: decreases are offset by decreases in cash. The direct method: preferred by the financial accounting standards board, provides clearer information about the sources and uses of cash, very few companies use it, takes more computations, only affects operating activities.
