The document provides information about preparing a cash flow statement, including:
1) It defines key terms like cash, cash equivalents, and explains the objectives and uses of a cash flow statement such as for short-term financial planning and dividend decisions.
2) It outlines the three categories of cash flows - operating, investing, and financing activities - and provides examples of cash inflows and outflows for each.
3) It presents the standard format for a cash flow statement with sections for the three categories of cash flows.
The document discusses the cash flow statement and how it differs from the profit and loss statement. It explains that the cash flow statement reflects the inflow and outflow of cash from operating, investing, and financing activities. It also provides examples of transactions that would be classified under each type of activity. Finally, it discusses the direct and indirect methods for preparing the cash flow statement.
The cash flow statement summarizes the cash inflows and outflows for A Ltd. for the year ended March 31, 2012. It shows that cash from operating activities was Rs. 40,000, which was primarily from net profit adjusted for depreciation. Cash used in investing activities was Rs. Nil. Cash from financing activities was Rs. Nil as bank loan repayment was offset by dividend payment. Overall, cash and cash equivalents increased by Rs. 8,000 to Rs. 30,000.
The document summarizes the key components and purpose of a cash flow statement. It discusses that a cash flow statement provides information about cash inflows and outflows from operating, investing, and financing activities over a period of time. It also describes how to prepare a cash flow statement using both the direct and indirect method and the differences between the two. The objectives, limitations, and distinction between a cash flow statement and funds flow statement are also outlined.
This document provides guidance on preparing a cash flow statement from operating activities. It outlines three levels of items to include or exclude when calculating cash from operating activities. Level 1 includes appropriations like dividends and reserves that are added back. Level 2 includes non-cash expenses like depreciation that are added back. Level 3 adjusts for changes in working capital like increases or decreases in current assets and liabilities. The document also provides an example of how to prepare a provision for tax account to determine the tax paid and made for the period.
The cash flow statement summarizes the cash inflows and outflows for A Ltd. for the year ended March 31, 2012. It shows a net cash from operating activities of Rs. 86,000, net cash used in investing activities of Rs. 60,000 from purchase of fixed assets, and net cash used in financing activities of Rs. 26,000 from repayment of bank loan and dividend payment. Overall, there was no change in the closing cash and bank balance of Rs. 30,000 from the opening balance.
This document discusses cash flow statements. It defines cash flow and cash flow statements, and explains the objectives and components. A cash flow statement has three sections - cash flow from operating activities, investing activities, and financing activities. It also provides examples of items that would be included in each section, such as cash from sales in operating activities and purchase/sale of property in investing activities. The document concludes by explaining how to prepare a cash flow statement using both the direct and indirect method.
The document presents a format for preparing a cash flow statement according to Accounting Standard 3 (Revised). It includes sections for cash flow from operating, investing and financing activities. Cash flow from operating activities involves calculating cash generated or used by adjusting net profits for non-cash/non-operating items and changes in working capital. Cash flow from investing tracks cash from the sale and purchase of fixed/intangible assets and investments. Cash flow from financing includes cash from issuing/repaying debt and paying dividends. Worked examples are provided to illustrate how to prepare a cash flow statement using the direct and indirect methods.
The document discusses the purpose and components of a statement of cash flows. It explains that the statement of cash flows provides information about a company's cash inflows and outflows during a period and summarizes operating, investing and financing activities. It is comprised of three sections - operations, investing activities, and financing activities. The statement of cash flows helps users assess a company's liquidity, financial flexibility, operating capabilities, and risk.
The document discusses the cash flow statement and how it differs from the profit and loss statement. It explains that the cash flow statement reflects the inflow and outflow of cash from operating, investing, and financing activities. It also provides examples of transactions that would be classified under each type of activity. Finally, it discusses the direct and indirect methods for preparing the cash flow statement.
The cash flow statement summarizes the cash inflows and outflows for A Ltd. for the year ended March 31, 2012. It shows that cash from operating activities was Rs. 40,000, which was primarily from net profit adjusted for depreciation. Cash used in investing activities was Rs. Nil. Cash from financing activities was Rs. Nil as bank loan repayment was offset by dividend payment. Overall, cash and cash equivalents increased by Rs. 8,000 to Rs. 30,000.
The document summarizes the key components and purpose of a cash flow statement. It discusses that a cash flow statement provides information about cash inflows and outflows from operating, investing, and financing activities over a period of time. It also describes how to prepare a cash flow statement using both the direct and indirect method and the differences between the two. The objectives, limitations, and distinction between a cash flow statement and funds flow statement are also outlined.
This document provides guidance on preparing a cash flow statement from operating activities. It outlines three levels of items to include or exclude when calculating cash from operating activities. Level 1 includes appropriations like dividends and reserves that are added back. Level 2 includes non-cash expenses like depreciation that are added back. Level 3 adjusts for changes in working capital like increases or decreases in current assets and liabilities. The document also provides an example of how to prepare a provision for tax account to determine the tax paid and made for the period.
The cash flow statement summarizes the cash inflows and outflows for A Ltd. for the year ended March 31, 2012. It shows a net cash from operating activities of Rs. 86,000, net cash used in investing activities of Rs. 60,000 from purchase of fixed assets, and net cash used in financing activities of Rs. 26,000 from repayment of bank loan and dividend payment. Overall, there was no change in the closing cash and bank balance of Rs. 30,000 from the opening balance.
This document discusses cash flow statements. It defines cash flow and cash flow statements, and explains the objectives and components. A cash flow statement has three sections - cash flow from operating activities, investing activities, and financing activities. It also provides examples of items that would be included in each section, such as cash from sales in operating activities and purchase/sale of property in investing activities. The document concludes by explaining how to prepare a cash flow statement using both the direct and indirect method.
The document presents a format for preparing a cash flow statement according to Accounting Standard 3 (Revised). It includes sections for cash flow from operating, investing and financing activities. Cash flow from operating activities involves calculating cash generated or used by adjusting net profits for non-cash/non-operating items and changes in working capital. Cash flow from investing tracks cash from the sale and purchase of fixed/intangible assets and investments. Cash flow from financing includes cash from issuing/repaying debt and paying dividends. Worked examples are provided to illustrate how to prepare a cash flow statement using the direct and indirect methods.
The document discusses the purpose and components of a statement of cash flows. It explains that the statement of cash flows provides information about a company's cash inflows and outflows during a period and summarizes operating, investing and financing activities. It is comprised of three sections - operations, investing activities, and financing activities. The statement of cash flows helps users assess a company's liquidity, financial flexibility, operating capabilities, and risk.
The document defines key terms related to a cash flow statement such as cash flows, cash equivalents, and the three categories of cash flows - operating, investing, and financing activities. It explains that the cash flow statement classifies cash inflows and outflows according to these three activities. The objectives are to determine the sources and uses of cash from each activity. The document also provides examples of cash inflows and outflows that would be included in each of the three activities.
The document discusses the concept, objectives, importance and preparation of a cash flow statement. A cash flow statement shows how cash flows in and out of a business over an accounting period. It categorizes cash flows as operating, investing and financing activities. The cash flow statement is important because it provides information about a company's liquidity and cash generating ability to assess its financial health. It is prepared by determining cash inflows and outflows from each category of activities.
The document discusses the statement of cash flows, explaining that it classifies cash inflows and outflows into operating, investing, and financing activities. It defines cash and cash equivalents, describes the format of the statement of cash flows using an example, and explains how the statement is prepared and used for decision making. The statement of cash flows provides important information about a company's cash generation and cash usage to evaluate its liquidity and ability to meet financial obligations.
This document outlines the requirements for preparing a statement of cash flows under Indian Accounting Standard 7. It discusses the objective to provide information on an entity's cash generation and usage. The standard requires classification of cash flows as operating, investing or financing activities. It provides definitions for key terms and guidance on treatment of items like foreign currency cash flows, interest and dividends, taxes and non-cash transactions.
Accounting basics and interview questions answersVijay D Narigara
This document provides definitions and explanations of various accounting concepts, principles, and terminology. It covers topics such as the definition of accounting, bookkeeping, accounting concepts, accounting conventions, accounting systems, accounting principles related to different types of accounts, meaning of journal, ledger, posting, trial balance, credit and debit notes, contra entries, petty cash book, promissory notes, cheques, bank reconciliation statements, capital and revenue expenditures and incomes, provisions, reserves, secret reserves, financial management objectives and functions, time value of money, capital structure, cost of capital calculations, capital budgeting techniques, and sources and applications of funds.
The document provides guidance on how to prepare a cash flow statement. It explains that a cash flow statement shows the inflow and outflow of cash from operating, investing, and financing activities. It discusses identifying cash sources and uses, classifying transactions, and preparing the statement using direct and indirect methods. The key is to distinguish between cash and accrual-based transactions and analyze changes in balance sheet accounts to determine the impact on cash flow.
The cash flow statement summarizes the inflows and outflows of cash and cash equivalents over a period of time. It has three sections - operating, investing, and financing activities. The operating section deals with cash from core business operations. The investing section includes cash from the purchase and sale of long-term assets. The financing section includes cash from activities related to changes in a company's capital structure and borrowing arrangements.
The document discusses accounting statements and cash flow. It provides an overview of key statements including the balance sheet, income statement, and statement of cash flows. The balance sheet presents a company's assets, liabilities, and equity on a given date. The income statement measures performance over a period of time by reporting revenues and expenses. The statement of cash flows reconciles cash flows from operating, investing, and financing activities. Sample statements are presented for a company called U.S. Composite Corporation to illustrate the components and analysis of each.
Pengantar Akuntansi 2 - Ch13 Statement of Cash Flowyuliapratiwi2810
This document discusses the statement of cash flows, including its usefulness, format, and preparation using the indirect method. It covers key topics such as distinguishing between operating, investing and financing activities; adjustments made to net income to reconcile to net cash from operating activities; and preparing the statement of cash flows. The objectives are to indicate the usefulness of the statement, distinguish activity types, and prepare the statement using the indirect method.
Cash flow statements provide important information about a company's sources and uses of cash that may not be apparent from income statements and balance sheets alone. They show cash inflows and outflows over a period of time to help evaluate a company's ability to generate cash and meet financial obligations. Key parties who use cash flow statements include management, shareholders, suppliers, investors, and employees. Companies prepare cash flow statements to comply with regulations and to assist with financial planning and assessing liquidity.
The document discusses cash flow statements, including what they are, their purpose and importance, how they are classified and prepared, and an example. Specifically:
- A cash flow statement shows cash generated and used during a period, organized into operating, investing, and financing activities.
- It provides insights into a company's liquidity and solvency, helps analyze future cash flows, and reveals management priorities and the quality of earnings.
- Cash flow statements classify cash flows as operating, investing, or financing activities and are prepared using balance sheets, income statements, and additional data. They summarize changes in a company's cash position during a period.
The document discusses cash flow statements, which show a company's cash inflows and outflows from operating, investing, and financing activities. Cash flow from operating activities includes cash from sales, services, and payments for supplies, employees, taxes. Investing activities involve cash from purchases/sales of property and equipment and other investments. Financing activities include cash from issuing/repaying debt and equity. The cash flow statement is important for understanding a company's liquidity and ability to meet obligations.
The document discusses the format and items to be included in the balance sheet as per the revised Schedule III of the Companies Act 2013.
1) It outlines the key items to be presented under equity and liabilities such as share capital, reserves and surplus, long term borrowings, short term borrowings, trade payables etc.
2) It also describes the assets side covering non-current assets like fixed assets, investments, long term loans and advances. Current assets include inventories, trade receivables, cash, short term loans and advances.
3) Examples of balance sheet preparation from trial balance are given to illustrate the classification of items as per the schedule.
IAS 7 provides guidance on cash flow statements. It requires entities to present a statement of cash flows which classifies cash flows during a period into operating, investing and financing activities. It aims to provide information about the ability of an entity to generate cash, its needs to utilize cash, and the timing and certainty of cash flows. The standard describes the content of the statement of cash flows, including requirements for presentation and disclosures.
The document defines a cash flow statement as a summary of cash receipts and payments for a period of time that explains changes in a firm's cash position. It has three sections - operating, investing, and financing activities - that show cash inflows and outflows. Operating activities relate to core business operations, investing activities involve long-term asset acquisition and disposal, and financing activities pertain to raising and repaying financial capital. The cash flow statement provides information on a firm's liquidity, cash generation, and ability to meet debt obligations.
The document discusses the cash flow statement, including its importance, purposes, components, and methods of preparation. Specifically, it defines operating, investing and financing activities. It also provides examples of indirect and direct methods to prepare the cash flow statement, including working notes and calculations. Finally, it includes a sample problem demonstrating the preparation of a cash flow statement using both the direct and indirect methods.
1. The document outlines the three main categories of cash flows for a company: operating, investing, and financing activities.
2. Operating activities involve cash effects from revenues and expenses that determine net income. Investing activities involve acquiring/disposing long-term assets and lending/collecting loans. Financing activities involve obtaining/repaying cash from debt and equity transactions.
3. Significant non-cash activities like asset exchanges are reported separately from cash flows. The statement of cash flows generally includes operating, investing, financing activities and non-cash transactions.
The document discusses the cash flow statement, which reports cash inflows and outflows during a period of time for operating, investing, and financing activities. It provides examples of cash inflows and outflows for each type of activity, such as cash sales and purchases for operating activities. The cash flow statement is useful for short-term financial planning and assessing a company's liquidity and cash position. It differs from an income statement by focusing only on cash effects of transactions.
Here are the steps to solve this problem:
1. Prepare a Trading and Profit and Loss Account for 2019 showing the net trading profit.
2. Calculate depreciation on machinery and fixtures & fittings based on given rates.
3. Deduct drawings and add interest on capital to calculate net profit for distribution.
4. Distribute net profit between partners based on their profit sharing ratio.
5. Prepare Balance Sheet as on 31st Dec 2019 showing assets, liabilities and capital of partners.
6. Calculate capital of each partner by adding/deducting their share of profit/loss, interest and drawings.
Let me know if you need help with the actual calculations. Solving partnership problems involves
Meaning
Objective or uses
Limitations of Cash-flow statement
Difference between cash-flow statement & cash budget
Procedures for preparing Cash-Flow Statement
Some terms are used in preparing cash-flow statement
Classification of cash flows
Some special items
Classification of business activities showing cash inflows & cash outflows
Format of cash flow statement
Illustration
Exercise
The document discusses cash flow statements, including their meaning, objectives, importance and limitations. It explains that a cash flow statement shows inflows and outflows of cash from operating, investing and financing activities during a period. Operating activities relate to main revenue generation, investing activities relate to purchase/sale of long-term assets, and financing activities relate to changes in capital/borrowings. The document also provides examples and classifications of various cash inflows and outflows under each activity.
The document defines key terms related to a cash flow statement such as cash flows, cash equivalents, and the three categories of cash flows - operating, investing, and financing activities. It explains that the cash flow statement classifies cash inflows and outflows according to these three activities. The objectives are to determine the sources and uses of cash from each activity. The document also provides examples of cash inflows and outflows that would be included in each of the three activities.
The document discusses the concept, objectives, importance and preparation of a cash flow statement. A cash flow statement shows how cash flows in and out of a business over an accounting period. It categorizes cash flows as operating, investing and financing activities. The cash flow statement is important because it provides information about a company's liquidity and cash generating ability to assess its financial health. It is prepared by determining cash inflows and outflows from each category of activities.
The document discusses the statement of cash flows, explaining that it classifies cash inflows and outflows into operating, investing, and financing activities. It defines cash and cash equivalents, describes the format of the statement of cash flows using an example, and explains how the statement is prepared and used for decision making. The statement of cash flows provides important information about a company's cash generation and cash usage to evaluate its liquidity and ability to meet financial obligations.
This document outlines the requirements for preparing a statement of cash flows under Indian Accounting Standard 7. It discusses the objective to provide information on an entity's cash generation and usage. The standard requires classification of cash flows as operating, investing or financing activities. It provides definitions for key terms and guidance on treatment of items like foreign currency cash flows, interest and dividends, taxes and non-cash transactions.
Accounting basics and interview questions answersVijay D Narigara
This document provides definitions and explanations of various accounting concepts, principles, and terminology. It covers topics such as the definition of accounting, bookkeeping, accounting concepts, accounting conventions, accounting systems, accounting principles related to different types of accounts, meaning of journal, ledger, posting, trial balance, credit and debit notes, contra entries, petty cash book, promissory notes, cheques, bank reconciliation statements, capital and revenue expenditures and incomes, provisions, reserves, secret reserves, financial management objectives and functions, time value of money, capital structure, cost of capital calculations, capital budgeting techniques, and sources and applications of funds.
The document provides guidance on how to prepare a cash flow statement. It explains that a cash flow statement shows the inflow and outflow of cash from operating, investing, and financing activities. It discusses identifying cash sources and uses, classifying transactions, and preparing the statement using direct and indirect methods. The key is to distinguish between cash and accrual-based transactions and analyze changes in balance sheet accounts to determine the impact on cash flow.
The cash flow statement summarizes the inflows and outflows of cash and cash equivalents over a period of time. It has three sections - operating, investing, and financing activities. The operating section deals with cash from core business operations. The investing section includes cash from the purchase and sale of long-term assets. The financing section includes cash from activities related to changes in a company's capital structure and borrowing arrangements.
The document discusses accounting statements and cash flow. It provides an overview of key statements including the balance sheet, income statement, and statement of cash flows. The balance sheet presents a company's assets, liabilities, and equity on a given date. The income statement measures performance over a period of time by reporting revenues and expenses. The statement of cash flows reconciles cash flows from operating, investing, and financing activities. Sample statements are presented for a company called U.S. Composite Corporation to illustrate the components and analysis of each.
Pengantar Akuntansi 2 - Ch13 Statement of Cash Flowyuliapratiwi2810
This document discusses the statement of cash flows, including its usefulness, format, and preparation using the indirect method. It covers key topics such as distinguishing between operating, investing and financing activities; adjustments made to net income to reconcile to net cash from operating activities; and preparing the statement of cash flows. The objectives are to indicate the usefulness of the statement, distinguish activity types, and prepare the statement using the indirect method.
Cash flow statements provide important information about a company's sources and uses of cash that may not be apparent from income statements and balance sheets alone. They show cash inflows and outflows over a period of time to help evaluate a company's ability to generate cash and meet financial obligations. Key parties who use cash flow statements include management, shareholders, suppliers, investors, and employees. Companies prepare cash flow statements to comply with regulations and to assist with financial planning and assessing liquidity.
The document discusses cash flow statements, including what they are, their purpose and importance, how they are classified and prepared, and an example. Specifically:
- A cash flow statement shows cash generated and used during a period, organized into operating, investing, and financing activities.
- It provides insights into a company's liquidity and solvency, helps analyze future cash flows, and reveals management priorities and the quality of earnings.
- Cash flow statements classify cash flows as operating, investing, or financing activities and are prepared using balance sheets, income statements, and additional data. They summarize changes in a company's cash position during a period.
The document discusses cash flow statements, which show a company's cash inflows and outflows from operating, investing, and financing activities. Cash flow from operating activities includes cash from sales, services, and payments for supplies, employees, taxes. Investing activities involve cash from purchases/sales of property and equipment and other investments. Financing activities include cash from issuing/repaying debt and equity. The cash flow statement is important for understanding a company's liquidity and ability to meet obligations.
The document discusses the format and items to be included in the balance sheet as per the revised Schedule III of the Companies Act 2013.
1) It outlines the key items to be presented under equity and liabilities such as share capital, reserves and surplus, long term borrowings, short term borrowings, trade payables etc.
2) It also describes the assets side covering non-current assets like fixed assets, investments, long term loans and advances. Current assets include inventories, trade receivables, cash, short term loans and advances.
3) Examples of balance sheet preparation from trial balance are given to illustrate the classification of items as per the schedule.
IAS 7 provides guidance on cash flow statements. It requires entities to present a statement of cash flows which classifies cash flows during a period into operating, investing and financing activities. It aims to provide information about the ability of an entity to generate cash, its needs to utilize cash, and the timing and certainty of cash flows. The standard describes the content of the statement of cash flows, including requirements for presentation and disclosures.
The document defines a cash flow statement as a summary of cash receipts and payments for a period of time that explains changes in a firm's cash position. It has three sections - operating, investing, and financing activities - that show cash inflows and outflows. Operating activities relate to core business operations, investing activities involve long-term asset acquisition and disposal, and financing activities pertain to raising and repaying financial capital. The cash flow statement provides information on a firm's liquidity, cash generation, and ability to meet debt obligations.
The document discusses the cash flow statement, including its importance, purposes, components, and methods of preparation. Specifically, it defines operating, investing and financing activities. It also provides examples of indirect and direct methods to prepare the cash flow statement, including working notes and calculations. Finally, it includes a sample problem demonstrating the preparation of a cash flow statement using both the direct and indirect methods.
1. The document outlines the three main categories of cash flows for a company: operating, investing, and financing activities.
2. Operating activities involve cash effects from revenues and expenses that determine net income. Investing activities involve acquiring/disposing long-term assets and lending/collecting loans. Financing activities involve obtaining/repaying cash from debt and equity transactions.
3. Significant non-cash activities like asset exchanges are reported separately from cash flows. The statement of cash flows generally includes operating, investing, financing activities and non-cash transactions.
The document discusses the cash flow statement, which reports cash inflows and outflows during a period of time for operating, investing, and financing activities. It provides examples of cash inflows and outflows for each type of activity, such as cash sales and purchases for operating activities. The cash flow statement is useful for short-term financial planning and assessing a company's liquidity and cash position. It differs from an income statement by focusing only on cash effects of transactions.
Here are the steps to solve this problem:
1. Prepare a Trading and Profit and Loss Account for 2019 showing the net trading profit.
2. Calculate depreciation on machinery and fixtures & fittings based on given rates.
3. Deduct drawings and add interest on capital to calculate net profit for distribution.
4. Distribute net profit between partners based on their profit sharing ratio.
5. Prepare Balance Sheet as on 31st Dec 2019 showing assets, liabilities and capital of partners.
6. Calculate capital of each partner by adding/deducting their share of profit/loss, interest and drawings.
Let me know if you need help with the actual calculations. Solving partnership problems involves
Meaning
Objective or uses
Limitations of Cash-flow statement
Difference between cash-flow statement & cash budget
Procedures for preparing Cash-Flow Statement
Some terms are used in preparing cash-flow statement
Classification of cash flows
Some special items
Classification of business activities showing cash inflows & cash outflows
Format of cash flow statement
Illustration
Exercise
The document discusses cash flow statements, including their meaning, objectives, importance and limitations. It explains that a cash flow statement shows inflows and outflows of cash from operating, investing and financing activities during a period. Operating activities relate to main revenue generation, investing activities relate to purchase/sale of long-term assets, and financing activities relate to changes in capital/borrowings. The document also provides examples and classifications of various cash inflows and outflows under each activity.
The document discusses analyzing cash flows and preparing statement of cash flows. It explains that the statement of cash flows helps address questions about cash generated or used in operations, expenditures from cash from operations, how dividends are paid with operating losses, and sources of cash. It also discusses the four parts of a statement of cash flows: cash, operating activities, investing activities, and financing activities. The document provides examples of cash flows for each category and steps for preparing a statement of cash flows using the direct or indirect method.
The document provides information about preparing a cash flow statement according to Accounting Standard 3 (Revised). It defines key terms like cash flows, cash and cash equivalents. It explains the direct and indirect methods for calculating cash flows from operating activities and discusses treatment of non-cash items. It also covers calculating cash flows from investing and financing activities and treatment of special items like taxes, interest and dividends. The document outlines the four steps for preparing a cash flow statement as calculating cash flows from operating, investing and financing activities and the net change in cash.
The document discusses the meaning, objectives, and preparation of cash flow statements. It explains that a cash flow statement classifies cash flows into three categories: operating, investing, and financing activities. It provides examples of cash inflows and outflows for each category, and discusses adjustments needed to reconcile net income to the net cash provided by operating activities, such as adding back depreciation. The document also covers definitions, treatments of special items like dividends, and methods to determine missing information in fixed asset accounts.
Accounting Standard-3 Cash Flow Statement by Nithin RajChinnu Raj
Are you Searching for the Complete Information on AS-3 (Cash Flow Statement)??You have come Correctly..Here is the Brief Description on Cash Flow Statement which enables the Students to gain the complete knowledge on AS-3.
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The document discusses analysis of cash flow statements. It defines cash flow statements and explains that they classify transactions into operating, investing and financing activities. Operating activities include cash from sales and payments for supplies. Investing activities involve purchases and sales of long-term assets. Financing activities comprise items like share issuances and debt repayments. The document also outlines the preparation of cash flow statements, uses of the statements, and limitations like ignoring non-cash transactions.
The document provides information about cash flow statements, including:
1. Cash flow statements show the inflows and outflows of cash and cash equivalents over a period of time for operating, investing, and financing activities.
2. Operating activities include principal revenue-generating activities and other day-to-day activities. Investing activities involve the acquisition and disposal of long-term assets. Financing activities involve activities that alter ownership equity and borrowing.
3. Typical cash inflows for operating activities include cash sales and collections from customers. Typical cash outflows are payments to suppliers and employees. For investing, typical cash inflows are from asset sales and typical cash outflows are for asset purchases. For financing,
Meaning of financial statement
Objectives of financial statement
Characteristics of financial statement
Nature of financial statement
Balance sheet
Format of balance sheet
Illustrations
Exercises
Statement of profit & loss
Format of statement of profit & loss
Notes of statement of profit &loss
Illustrations
Exercises
The document discusses key aspects of preparing a cash flow statement according to Accounting Standard 3. It defines cash flow statement, cash, and cash equivalents. It explains the three types of cash flows - from operating, investing, and financing activities. It provides examples of calculating cash flow from operating activities using the indirect method, and discusses the objectives and limitations of the cash flow statement.
This document provides an overview of cash flow statements. It begins by explaining what a cash flow statement is and its objectives. A cash flow statement assesses a firm's ability to generate and use cash over a period of time. It shows sources of cash from operations, investments, and financing, as well as uses of cash. The document then discusses the direct and indirect methods for preparing a cash flow statement according to Accounting Standard 3. It also provides examples of cash inflows and outflows from operating, investing, and financing activities.
The document discusses the statement of cash flows, including its purpose and components. It explains that the statement of cash flows reports an entity's cash flows during a period and fulfills purposes like predicting future cash flows and evaluating management decisions. It describes the three sections of the statement of cash flows - operating, investing, and financing activities - and provides examples of cash inflows and outflows that would be included in each section. The document also covers the direct and indirect methods for preparing the statement of cash flows and includes examples of classwork problems preparing the statement of cash flows.
The document discusses the key differences between operating, investing, and financing activities reported on a statement of cash flows (SCF) compared to a statement of income (SCI). Operating activities on the SCF include cash from sales and expenses, while investing activities include cash from purchases/sales of long-term assets and loans. Financing activities on the SCF include cash from equity/debt activities like issuing shares or paying dividends. The SCF provides a picture of a company's cash generation and requirements over a period through these three categories of cash flow.
The document provides an overview and definitions for key terms related to the statement of cash flows, including:
- The statement of cash flows reports sources and uses of cash divided into operating, investing, and financing activities.
- Transactions not involving cash are reported separately.
- Free cash flow is calculated as cash from operating activities less maintenance capital expenditures and dividends.
- The indirect and direct methods for preparing the operating activities section are described.
- Investing activities involve long-term assets, financing activities involve long-term liabilities and equity.
- Several examples are provided to illustrate preparing sections of the statement of cash flows.
The document provides an overview of International Accounting Standard 7 on the statement of cash flows. It discusses the scope, objectives, definitions, presentation requirements, and reporting requirements for the statement of cash flows including the classification of cash flows as operating, investing and financing activities. It also covers topics like foreign currency cash flows, interest and taxes, subsidiaries, non-cash items, and the components of cash and cash equivalents that must be disclosed.
The document provides an overview of International Accounting Standard 7 on the statement of cash flows. It discusses the scope, objectives, definitions, presentation requirements, and reporting requirements for the statement of cash flows including the classification of cash flows as operating, investing and financing activities. It also covers topics like foreign currency cash flows, interest and taxes, subsidiaries, non-cash items, and the components of cash and cash equivalents that must be disclosed.
A cash flow statement summarizes the inflows and outflows of cash from operating, investing, and financing activities over a specific period of time. It reveals how cash was generated and where it came from and went to. The primary objective is to provide information on the changes in cash position between two balance sheet dates. Some limitations include that it does not reflect changes in working capital and can be influenced by management policies. A cash flow statement differs from a fund flow statement in that the latter considers changes in net working capital rather than just cash, and is more useful for long-term analysis.
The document discusses the importance and preparation of the statement of cash flows, which provides a summary of the amount of cash and cash equivalents entering and leaving a company during an accounting period. It explains that the statement of cash flows has three main sections - operating activities, investing activities, and financing activities - that show cash flows from core business operations, long-term asset and investment activities, and capital structure activities like share issuance and debt repayment. The document also outlines the key steps and sources of information used to prepare the statement of cash flows.
This document discusses accounting standards and cash flow statements. It provides definitions for key terms like cash flows, operating activities, investing activities and financing activities. It explains that accounting standards specify how transactions are recognized, measured and presented in financial statements. Cash flow statements classify cash flows into operating, investing and financing activities and can be prepared using the direct or indirect method. The document also discusses the applicability of cash flow statements for different types of companies and accounting standards.
The document provides an overview of IAS 7 Statement of Cash Flows. It discusses:
1) The objective of the statement of cash flows is to provide information about a company's cash receipts and cash payments.
2) Cash flows are classified into operating, investing and financing activities.
3) The statement of cash flows can be prepared using either the direct or indirect method, with the direct method being encouraged for operating cash flows.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. ACCOUNTING FOR MANAGEMENT
Dr. Mustafa K
Visiting Faculty
School of Management Studies,
DCMS, University of Calicut
mustafapsmo@gmail.com
M B A FIRST SEMESTER
CASH-FLOW STATEMENT
2. Contents
• Meaning
• Objective or uses
• Limitations of Cash-flow statement
• Difference between cash-flow statement & cash budget
• Procedures for preparing Cash-Flow Statement
• Some terms are used in preparing cash-flow statement
• Classification of cash flows
• Some special items
• Classification of business activities showing cash inflows &
• cash outflows
• Format of cash flow statement
• Illustration
• Exercise
3. Meaning
•Acash-flow statementis a statement
showing inflows (receipts) and outflows
(payments) of cash & cash equivalents
during a particular period.
4. Objective & Uses
o It is useful for short-term financial planning.
o It is useful in preparing cash budget.
o It ishelpful in studying the trend of cash
receipts & payments.
o It is helpful in making dividend decisions.
o It helps the investors, debenture- holders,
lenders etc.
5. Limitations
It is not suitable for judging the
liquidity of a firm.
There is a possibility of window-
dressing.
It ignores non-cash transactions.
It ignores the accrual concept of
accounting.
It is historical in nature.
6. Difference between cash-flow statement
& cash budget
• There is not so much difference a
cash-flowstatement and a cash
budget.
• The only difference is that a cash-
flow statement is prepared for a
past period whereas cash budget is
prepared for a future period.
7. Procedure of preparing a Cash-Flow
Statement
ICAI has issued AS-3, for preparing
a cash flow statement. As per this
AS-3,some terms are mandatory for
certain enterprises.These are:-
o It is mandatory to prepare cash flow
statement to those commercial, industrial
and business enterprises whose turnover
exceeds ₹ 5o crore.
o It is also mandatory to prepare cash
flow statement those are listed in stock
8. Terms are used in preparing cash
flow statement
• Cash :- it consists cash-in-hand &
demand deposits with bank.
• Cash & cash equivalent :-it is short term
investments, which arematured within 3
months from acquisition.It consists of :
a. Cash in hand
b. Cash at bank
c. Short-term deposits
d. Short-term investments
e. Cheque and drafts on hand
9. Classification of cash flows
• According to AS-3,
• A cash flow statement should be
presented in a mannerthat it reports
inflows and out flowsof cash by classifying
them into three categories. These are :-
a. Cash flows from operating
activities.
b. Cash flows from investing activities.
10. Cash flows from operating activities
• Operating activities are the main revenue
generating activities of an enterprises.
• It includes cashflows from those transaction and
events which enter intothe ascertainment of net
profit or loss of the enterprises.
11. Continue…….
Examples :-
a. cash receiptsfrom the sale of goods &
rendering of services.
b. Cash receipts from royalties, fees,
commissions and other revenues.
c. Cash receipts from debtors and bills
receivables.
d. Cash payments for purchase of goods &
services.
e. Cash payments to creditors and bills
receivables.
f. Cash payments of wages, salaries and other
payment to employees.
12. Cash flows from investing activities
• Investing activities include the purchase and sale
of long-term assets suchas land, buildings,
plant and machinery etc. not held for resale.
• Example:-
1. Cash payments to acquire fixed assets
(including tangible)
2. Cash receipts from sale of fixed assets
3. Cash payments to acquire shares, warrants or
• debt instruments of other enterprise.
4. Cash receipts of insurance claim for property
involved in accident etc.
13. Cash flows from financial activities
• Financial activities are those activities
that result in change in capital and
borrowings of the enterprise.
•Examples:-
o Cash receipts from issuing shares or
other similar instruments.
o Cash receipts from issuing debentures,
loans, bonds, and other short-term or long-
term borrowings.
14. Continue….
o Cash payments of dividend both on
preference and equity shares and also
cash payments for interest on
debentures and loans.
o Cash payment for buy-back of equity
shares.
o Cash repayments of the amount borrowed
including redemption ofdebentures, bonds,
preferenceshares etc.
15. Some special items
a. Interest & Dividends :- cash inflows & outflows from
interest & dividend should be disclosed separately.
Cash receive from interestanddividend shownin
investing activities;and cash payment of interest
and dividend shown in financial activities.
b. Taxes on income :- tax paid is a part of cash flows
from operating activities.
c. Extraordinary items :- itincludes baddebts
recovered, claims received frominsurance companies,
winning of a lottery or a law suit etc.
d. Significant non-cash transaction :- non-cash Expenses
16. Classification of business activities showing cash inflows & cash
outflows
I. Operating activities
Cash inflows:
i. Cash Sales
ii. Cash received from
royalty, fees and
commission
iii. Cash received from
debtors/trade receivables
Cash outflows:
i. Cash purchases
ii. Cash paid to
creditors/trade payables
iii. Payment of operating
expenses like wages,
salary. Office and selling
expenses.
iv. Payment of income tax
17. Continue…….
Operating activities
Cash inflows (in case of
financial companies) :
i. Interest and dividend
received in cash
ii. Proceeds from sale of
securities
iii. Loans and advance
repaid by third parties
Cash outflows (in case of
financial companies) :
i. Interest paid in cash
ii. Payment for purchase
of securities
iii. Loans and advances to
third parties
18. II. Investing activities
Cash inflows:
i. Proceeds from sale of fixed
assets
ii. Proceeds from sale of non-
current investments
iii. Interest received on debentures
iv. Dividend received on shares
Cash outflows :
i. Purchase of fixed assets
ii. Purchase of non-current
investments
19. III. Financial Activities
Cash inflows :
i. Proceeds from issue of
shares in cash
ii. Proceeds from issue of
debentures in cash
Proceeds from long-
term borrowings
iii.
Cash outflows:
i. Payment for buy-back of equity
shares
ii. Payment for redemption of
preference shares
Payment for redemption of
debentures
iv. Repayment of loans
v. Payment of dividend
vi. Payment of interest
iii.
21. Cash flow statement of ………
For the year ended…………………
Particulars
Detail
₹
Amount
₹
A. Cash flows from operating activities :
Net profit before tax*
Adjustments for non-cash & non-operating items-
Add : Depreciation
Preliminary expenses/discount on issue of shares &
debentures written off
Goodwill, patents and trademarks amortised
Interest on long-term borrowings
Loss on sale of fixed assets
Less : Interest income
Dividend income
Rental income
Profit on sale of fixed assets
Operating profit before working capital changes
Add : Decrease in current assets
Increase in current liabilities
Less : Increase in current assets
Decrease in current liabilities
Cash generated from operations
less : Income tax paid (Net of tax refund received)
Net cash from (or used in) operating activities
22. Continue……
B. Cash flows from investing activities :
Proceeds from sale of tangible fixed assets
Proceeds from sale of intangible fixed assets like goodwill
Proceeds from sale of non-current investments
Interest and dividend received
Rent received
Purchase of tangible fixed assets
Purchase of intangible fixed assets like goodwill
Purchase of non-current investments
Net cash from (or used in) investing activities
C. Cash flows from financial activities :
Proceeds from issue of shares & debentures
Proceeds from other long-term borrowings
Final dividend paid
Interim dividend paid
Interest on long-term borrowings paid
Repayment of loans
Redemption of debentures
Net cash from (or used in) financial activities
Net increase (or decrease) in cash & cash equivalents (A+B+C)
Add : Cash & Cash equivalents in the beginning of the year
Cash & Cash equivalents at the end of year
23. Note : 1 Calculation of net profit before tax:
Particulars Amount
₹
Net profit of the current year (after appropriation)
Add : Transfer to reserves (all transfers to reserves from
balances of the statement of profit & loss)
Proposed dividend for current year
Interim dividend paid during the year
Provision for tax made during the current year
Less : Refund of tax
Net profit before tax
25. Q1. From the following balance sheet of ABC Ltd; you are required to prepare a cash flow
statement :-
Particulars Note
no.
31-3-19
(₹)
31-3-18
(₹)
I. Equity & Liabilities :
(1) Shareholder’s Funds –
a. Share capital 2,00,000 2,00,000
b. Reserves & surplus 1,55,000 80,000
(2) Current liabilities –
a. Trade payables 1,28,000 1,45,000
b. Short-term provision 1 45,000 35,000
Total 5,28,000 4,60,000
II. Assets :
(1) Non-current assets –
a. Fixed assets
(i). Tangible assets 2 2,00,000 1,50,000
(ii). Intangible assets 3 33,000 40,000
(2) Current assets –
26. Continue……….
(2) Tangible assets :
Machinery
(3) Intangible assets :
2,00,000 1,50,000
a. Current investments 4 15,000 12,000
b. Inventory 2,15,000 1,80,000
c. Trade receivables 50,000 60,000
d. Cash & cash equivalents 10,000 8,000
e. Other current assets 5 5,000 10,000
Total 5,28,000 4,60,000
Notes :- 31-3-19 31-3-18
(1) Short term provision :
Provision for taxation 45,000 35,000
Goodwill 33,000 40,000
(4) Current investments :
Marketable securities 15,000 12,000
(5) Other current assets :
Prepaid expenses 5,000 10,000
27. Additional information :-
I. Machinery whose original cost was ₹
50,000 was sold for ₹ 10,000 during
the year. Accumulated depreciation
on this machinery was ₹ 26,000.
II.Depreciation on machinery charged
during the year ₹ 20,000.
III.Dividend paid during the year @
10% on equity share capital.
28. Cash flow statement of ABC Ltd.
For the year ended 31st march 2018 & 2019
Particulars Details
₹
Amount
₹
A. Cash flows from operating activities :
Net profit before tax (note - 1) 1,40,000
Adjustments for non-cash & non-operating activities –
Add : Depreciation on machinery 20,000
Trade receivables 14,000
Goodwill written off 7,000 41,000
Operating profit before working capital changes 181,000
Add : Decrease in current assets –
Trade receivables 10,000
Prepaid expenses 5,000 15,000
1,96,000
Less : Increase in current assets –
Inventory 35,000
Decrease in current liabilities-
Trade payable 17,000 (52,000)
29. Continue………
1,44,000
Payment of tax (for 2014) (35,000)
Net cash from operating activities 1,09,000 1,09,000
B. Cash flows from investing activities :
Purchase of machinery (note-2) (94,000)
Sale of machinery 10,000
Net cash used in investing activities (84,000) (84,000)
C. Cash flows from financial activities :
Dividend paid (20,000) (20,000)
Net increase in cash and cash equivalents (A+B+C) 5,000
Add : Cash & cash equivalents in the beginning of the
period(note-3)
20,000
Cash & cash equivalents at the end of the period 25,000
30. Notes –
₹
1. Profit before tax –
Balance of reserves & surplus on
31-3-2019
(-) Balance of reserves & surplus on
1,55,000
31-3-18 80,000
75,000
Add : Provision for taxation for 2015 45,000
Dividend paid (10% on ₹
2,00,000) 20,000
1,40,000
31. 2.
Dr.
Machinery A/c
Cr.
Particulars Amount
₹
Particulars Amount
₹
To balance b/d 1,50,000 By bank 10,000
To bank A/c (bal. fig. being
purchase)
94,000 By loss on value 14,000
By depreciation 20,000
By balance b/d 2,00,000
2,44,000 2,44,000
3. Cash & cash equivalents : 31-3-19 31-3-18
Cash & cash equivalents 10,000 8,000
Marketable securities 15,000 12,000
25,000 20,000
32. Q 2. From the following balance sheet of Rajan Ltd. Prepare cash flow statement :
Particulars Note no. 31-12-17
₹
31-12-16
₹
I. Equity & Liabilities :
(1) Shareholder’s Funds –
a. Share capital 1 2,50,000 2,25,000
b. Reserves & surplus 2 59,000 35,000
(2) Current liabilities –
a. Trade payables 49,500 37,500
Total 3,58,500 2,97,500
II. Assets :
(1) Non-current assets –
a. Fixed assets :
(i). Tangible assets 3 1,60,000 1,20,000
(ii). Intangible assets 4 20,000 36,000
(2) Current assets –
a. Inventory 15,000 10,000
b. Trade receivables 1,54,500 1,19,000
33. Continue…….
Notes : 31-12-17 31-12-16
c. Cash & cash equivalent 9,000 12,500
Total 3,58,500 2,97,500
1. Share capital :
Equity share capital 2,00,000 1,50,000
12% Preference share 50,000 75,000
2,50,000 2,25,000
2. Reserves & surplus :
General Reserve 35,000 20,000
Profit & loss balance 24,000 15,000
59,000 35,000
3. Tangible assets :
Building 60,000 80,000
Plant 1,00,000 40,000
1,60,000 1,20,000
4. Intangible assets :
Goodwill 20,000 36,000
34. Cash flow statement of Rajan Ltd.
For the year ended 31st December 2016 & 2017
Particulars Detail
₹
Amount
₹
A. Cash flows from operating activities :
Net profit before profit (note-1) 24,000
Adjustments for non-cash and non-operating items –
Add: Depreciation on plant 10,000
Depreciation on building 60,000
Goodwill written off 16,000
Operating profit before working capital changes 1,10,000
Add : Increase in current liabilities-
Trade Payables 12,000
Less : Increase in current assets –
Inventory 5,000
Trade receivables 35,500 (40,500)
Net cash from operating activities 81,500 81,500
B. Cash flows from investing activities :
Purchase of building (note-2) (40,000)
35. Continue ……..
Working notes :-
Purchase of plant (note-3) (70,000)
Net cash used in investing activities (1,10,000) (1,10,000)
C. Cash flows from financial activities :
Issue of equity share capital 50,000
Redemption (repayment) of preference share capital (25,000)
Net cash flows from financing activities 25,000 25,000
Net decrease in cash & cash equivalent (A+B+C) (3,500)
Add : Cash & cash equivalent in the beginning of the period 12,500
Cash & cash equivalents at the end of the period 9,000
1. Calculation of net profit before tax –
Profit & loss balances on 31-12-17
24,000
Less : Profit & loss balances on 31-12-16 (15,000)
9,000
Add : Transfer to general reserves (35,000 - 20,000) 15,000
Net profit before tax 24,000
36. 2.
Dr
.
Building A/c
Cr.
3.
Dr
.
Plant A/c
Cr.
Particulars Amount
₹
Particulars Amount
₹
To balance b/d 80,000 By depreciation 60,000
To bank a/c (bal. fig., being
purchase)
40,000 By balance c/d 60,000
1,20,000 1,20,000
Particulars Amount
₹
Particulars Amount
₹
To balance b/d 40,000 By depreciation 10,000
To bank a/c (bal. fig., being
purchase)
70,000 By balance c/d 1,00,000
1,10,000 1,10,000
38. Q 1. Prepare a cash flow statement from the following balance sheet of XYZ Ltd. :-
Particular Note
no.
31-12-19
₹
31-12-18
₹
I. Equity & liabilities :
(1) Shareholder’s Funds –
a. Share capital 1 8,50,000 4,60,000
b. Reserves & surplus 2 1,70,000 2,40,000
(2) Non-current liabilities –
a. Long-term borrowings 3 1,80,000 2,00,000
Total 12,00,000 9,00,000
II. Assets :
(1) Non-current assets –
a. Fixed assets 7,00,000 5,00,000
(2) Current assets –
a. Inventory 2,50,000 2,10,000
b. Trade receivables 1,90,000 1,40,000
c. Cash & cash equivalents 60,000 50,000
Total 12,00,000 9,00,000
39. Continue……….
Notes : 31-12-18 31-12-19
1. Share capital –
Equity share capital 7,50,000 4,00,000
8% preference share capital 1,00,000 60,000
8,50,000 4,60,000
2. Reserves & surplus –
General reserves 50,000 70,000
Profit & loss balances 1,20,000 1,70,000
1,70,000 2,40,000
3. Long-term borrowings 1,80,000 2,00,000
40. Q 2. From the following information, prepare a cash flow statement :
₹
Opening cash balance 15,000
Closing cash balance 17,000
Decrease in inventory 8,000
Increase in bills payables 12,000
Sale of fixed assets 30,000
Repayment of long-term loan 50,000
Net profit for the year 2,000
41. Q 3. Calculate cash from operating activities :-
31-3-19
₹
31-3-18
₹
Profit & loss balances 30,000 35,000
General reserves 10,000 15,000
Provision for depreciation on plant 30,000 35,000
Outstanding expenses 5,000 3,000
Goodwill 20,000 10,000
Trade receivables 40,000 35,000