ppt09 Statement of cash flows 会计英语（第四版） 教学课件.pptVIP

YE SUN AccountingEnglish Financial Accounting 1 Lesson summary 1 Lesson 9 Statement of cash flows Purpose of the Statement of Cash Flows Helps investors with questions about the company’s: Ability to generate positive cash flows. Ability to meet its obligations and to pay dividends. Need for external financing. Investing and financing transactions for the period. Classification of Cash Flows Operating Activities Investing Activities Inflows from: Selling investments or plant assets. Collecting of principal on loans. Financing Activities Inflows from: Short-term and long-term borrowing. Owners (for example, from issuing stock). Cash and Cash Equivalents Direct MethodCash Received from Customers Accrual basis revenue includes sales that did not result in cash inflows. Can be computed as: Direct MethodCash Received from Customers The A/R balance was $40,000 on 1/1/99 and $52,000 on 12/31/99. If accrual sales revenue for 1999 was $800,000, what was cash basis revenue? Direct MethodCash Received from Customers The A/R balance was $40,000 on 1/1/99 and $52,000 on 12/31/99. If accrual sales revenue for 1999 was $800,000, what was cash basis revenue? Direct MethodInterest and Dividends Received  Direct MethodCash Paid for Merchandise Step 1 Step 2 Direct MethodCash Paid for Merchandise How much did Lug Lite pay for inventory in 1999? a. $900,000 b. $923,000 c. $947,000 d. $877,000 Direct MethodCash Paid for Merchandise How much did Lug Lite pay for inventory in 1999?  a. $900,000 b. $923,000 c. $947,000 d. $877,000 Direct MethodCash Payments for Expenses Indirect Method Indirect Method Managing Cash Flows Managing Cash Flows Increase collection of accounts receivables. Keep inventory low. Delay payment of liabilities. Plan timing of major expenditures. Invest idle cash. Cash Budgeting Cash Budgeting End of lesson 9 * * * * Provides information about the cash receipts and cash payments of a business entity during the accounting period.