The statement of Cash Flows 8q
3 important questions on The statement of Cash Flows 8q
What does the Statement of Cash Flows report?
Sources of cash represent inflows of funds
Uses of cash represent outflows of funds
How do you compare Liabilities & Equity in the Statement of Cash Flows?
When comparing assets from last period’s balance sheet to this period’s:
Increases in liabilities and owners’ equity represent sources of funds.
Decreases in liabilities and owners’ equity represent uses of funds.
What is needed in order to create the Statement of Cash
Flows?
you need: Income statement for this year, including a statement of
retained earnings, Balance sheet from last year and a Balance sheet from this year
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