Accounting Chapter 5 Cash Flow Exam Review

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15 Apr 2012
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Step One: Net Income or Net loss
Step Two: Gains, Losses, Depreciation expense
- Subtract gains, add expenses and losses
Step Three: Take changes in working capital (current assets and current liabilities EXCLUDING cash)
Increase Decrease
Current Assets - +
(Opposite)
Current Liabilities + -
(Same)
Step Four:
Investing
- PPE
- Long-term investment
Financing
- Debt
- Equity
- Dividends
*When buying something you put brackets to show that cash is going out. And it’s the opposite
when selling.*
Operating activities+ investing activities + Financing activities
= Increase/Decrease in cash + cash beginning of the year
= Cash at the end of the year
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