Flashcards
Cash flow Statements - FLASH CARDS
Cards in this deck (11)
- 1What are the 3 heading in the cash flow statement?- Operating Activities
- Investing Activities
- Financial Activities - 2What is included in the Operating Activities?- the main revenue-producing activities of the business, together with the payment of interest and tax
- 3What is included in the Investing Activities?- The acquisition and disposal of long-term assets, and other investments
- 4What is included in the Financial Activities?- Receipts from the issue of new shares, payments to repay shares, changes in long-term borrowings, and dividends paid
- 5What is the layout for the cash flow statement?
- 6How is a profit on sale of non-current asset recorded?- In operating activities section
(Less) profit on sale of non-current asset
-In investing activities section
Add proceeds from sale of non-current asset - 7Is 'Revaluation of Non-Current Assets' recorded in the cash flow statement?- This a non cash item so there is no entry in the cash flow
statement - 8Where is 'Revaluation of Non-Current Assets' recorded?- When a revaluation increases the value of an asset, the value of the asset is increased and the amount is placed to a revaluation reserve in the equity section of the balance sheet where it increases the value of the shareholders' investment in the company
- 9what are the Function of the Cash Flow Statement?- Required to be included as part of a company's financial statements
- A Cash Flow Statement uses information from the accounting records (including income statements and balance sheets) to show an overall view of money flowing in and out of a business during an accounting period
- This statement explains to the shareholders why, after a profitable year, there is a reduced balance at the bank or a larger bank overdraft at the year end than it was at the beginning of the year - 10What do you do when Assessing Cash Flow Statementin terms of money concepts?- Uses the money measurement concept. Only items which can be recorded in money terms can be included; also we must be aware of the effect of inflation if comparing one year to the next
- 11What do you do when Assessing Cash Flow Statement in terms of operating activities and the cash (used in)/from operations?- Look for positive cash flows from operating activities section. Look at the sub total 'cash (used in)/from operations' - this shows the cash from revenue-producing activities before the payment of interest and tax
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- A-Levels Accounting A2 Unit 3 (6 Cash Flow Statements) Flashcards on Cash flow Statements - FLASH CARDS, created by Harshad Karia on 20/05/2014.
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- Harshad Karia
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