Accounting: Cash Flow Statement

macro micro economics

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

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)

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