AFM101 Chapter Notes - Chapter 5: Operating Cash Flow, Accounts Payable, Cash Flow
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AFM101 Full Course Notes
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The income statement reports revenues earned and expenses incurred during a period of time. The statement of financial position reports the assets, liabilities, and equity of a business at a point in time. The statement of cash flows reports cash receipts and cash payments of a business, during a specific period of time, from three broad categories of business activities: operating, investing, and financing. The statement of cash flows reports cash receipts and cash payments from three broad categories of business activities: operating, investing, and financing. While the income statement reports operating activities, it reports them on the accrual basis: revenues when earned, and expenses when incurred, regardless of the timing of the cash received or paid. In contrast, the statement of cash flows reports the cash flows arising from operating activities. The statement of financial position reports assets, liabilities, and equity at a point in time.