Cash flow Statements - FLASH CARDS

Harshad Karia
Flashcards by Harshad Karia, updated more than 1 year ago
Harshad Karia
Created by Harshad Karia over 7 years ago
66
2

Description

A-Levels Accounting A2 Unit 3 (6 Cash Flow Statements) Flashcards on Cash flow Statements - FLASH CARDS, created by Harshad Karia on 05/20/2014.

Resource summary

Question Answer
What are the 3 heading in the cash flow statement? - Operating Activities - Investing Activities - Financial Activities
What is included in the Operating Activities? - the main revenue-producing activities of the business, together with the payment of interest and tax
What is included in the Investing Activities? - The acquisition and disposal of long-term assets, and other investments
What 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
What is the layout for the cash flow statement?
How 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
Is '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
Where 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
what 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
What 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
What 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
Show full summary Hide full summary

Similar

Cash Flow Statements
Harshad Karia
IAS Notes
Harshad Karia
Published Accounts of Limited Companies
Harshad Karia
IAS Notes Cont.
Harshad Karia
Sources of Finance
Harshad Karia
IAS Titles
Harshad Karia
Sources of Finance - created from Mind Map
Harshad Karia
Cash Flow Statements
mehreenahmed96
Published Accounts of Limited Companies
neha Gowry
Cash Flow Statements
Charlotte Ambali