September 1st, 2011 
Alexander Glaser 
Cash Flow Statement
Operations: Income statement, current assets, Current Liabilities
Investing: Long term assets such as equipment and property
Financing: Long term liability and equity such as dividends and notes payable
- Interest is operation
Direct – preferred by FASBE
- Lists receipts and disbursements
Indirect- starts with net income
- Reconciles to cash
- Everyone uses
Operating Cash Flow
Net Income
Adjust for now cash income statement items
Adjust for changes in current assets and liabilities
Income Statement
Revenue $4000
Expenses $2000
Net Income $2000
Balance Sheet
Begin Ending
12/31/09 12/21/10
Cash 4000 3000
Accounts receivable 2500 2000
Prepaid Expense 1500 2000
Accounts Payable 3000 2000
Unearned revenue 1500 2000
Cash Flow Statement
T account for Account Receivable
Income Statement
Revenue $4000
Expenses $2000
Net Income $2000
Decrease in accounts receivable 500
Income Statement
Revenue $4000
Expenses $2000
Net Income $2000
Increase in Prepaid (500)
Accounts Payable went from 3000 à 2000
Income Statement
Revenue $4000
Expenses $2000
Net Income $2000
Increase in Prepaid (500)
Decrease in Account Payable (1000)
Increase in unearned revenue, 1500 to 2000
Income Statement
Revenue $4000
Expenses $2000
Net Income 2000
Operating Cash Flow Statement
Net Income $2000
Increase in Prepaid (500)
Decrease in Account Payable (1000)
Increase in Unearned Revenue 500
Cash flow from operations 1500
Investing Cash Flow
Purchasing Equipment (6000)
Financial Cash Flow
Increased Notes Payable 5000
Dividend (5000)
Posted in 
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