MGT 11A Chapter 12: CHAPTER 12 - pt 2
Document Summary
Some investing and financing activities do not affect cash flows. Ex: purchase of long-term assets using a long-term note payable (loan) This transaction impacts investing and financing activities but does not impact current-period cash. Such transactions reported at the bottom of the statement of cash flows or in a note to the statement. Format of the statement of cash flows. Shows the net increase or decrease from those activities (operating, investing, financing) and ties it into the cash balance. Any noncash investing and financing transactions are disclosed in a note or separate schedule. Five steps in preparing the statement of cash flows. Step 1: current period"s cash balance - the prior period"s cash balance. This is the bottom-line figure for the statement of cash flows and is a check on accuracy. A company"s cash receipts and cash payments are recorded in its cash account. Cash account is one place to look for info about cash flows.
