Income statement and flow of cash
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The document discusses income statements, cash flow, and the statement of cash flows. It defines income as earnings from operations, expenses as costs to earn income, and profit as income minus expenses. It explains that cash flow shows where cash came from and was spent, and the statement of cash flows categorizes these cash flows into operating, investing, and financing activities to evaluate a company's liquidity, solvency, and flexibility.
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Income statement and flow of cash
- 1. Income Statement and Flow of Cash Dr Nayyar R. Kazmi
- 14. The Statement of Cash Flows Content and Format Operating Cash inflows and outflows from operations. Investing Cash inflows and outflows from non-current assets. Financing Cash inflows and outflows from non-current liabilities and equity. The statement’s value is that it helps users evaluate liquidity, solvency, and financial flexibility.
- 16. The Statement of Cash Flows Preparation BE 5-12 Midwest Beverage Company reported the following items in the most recent year. Activity Operating Financing Operating Operating Investing Operating Financing Required: Prepare a Statement of Cash Flows
- 17. The Statement of Cash Flows Preparation Noncash credit to revenues. Noncash charge to expenses.
Editor's Notes
- Increase in Liability is a Source of Cash, because although increasing liabilities mean you have to pay more in future, BUT NOT NOW, which means for the time being the cash is with you for other purposes.