Accounting- Cash Flow Notes
18/04/2013
BUSS 1030
Accounting, Business and Society Lecture 8: Statement of Cash Flows
Chapter 8 Measuring & reporting cash flows pages 448-472 448 472 pages 484-489
1 1
Learning objectives
1. 2. 3. 4.
Explain why cash is important to the reporting entity Define cash and cash equivalents Distinguish between accrual- and cash-based transaction recognition Compare and contrast the roles of the four external financial reports (statement of financial performance, statement of financial position, statement of changes in equity and statement of cash flows) Discuss the three components of the statement of cash flows (operating activities, investing activities, financing activities)
5.
2
Learning objectives
6. 7. 8. 9. 10.
Identify non-cash transactions Recognise the alternative approaches to preparing a statement of cash flows Prepare a simple statement of cash flows Prepare a reconciliation of net p p profit to cash flow from operations p Explain how the statement of cash flows can be useful for identifying cash flow management strengths, weaknesses and opportunities
3
1
18/04/2013
The importance of cash and cash flow
• •
Cash is king ! Cash is important because organisations and people will not normally accept any other form of settlement of claim Businesses fail as a result of their inability to find sufficient cash to settle their responsibilities These factors make cash the critical business asset and, therefore, the one analysts and others watch carefully in assessing survivability of the business
Profitable business fail all the time. Accruel accounting gives you better information of greater business Gd
•
Statement of cash flows: bank rec from the
•
4
Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 9781442534803/Atrill/Accounting: An Introduction/5th edition
The importance of cash and cash flow
•
The statements of financial position, statement of financial
BUSS 1030
Accounting, Business and Society Lecture 8: Statement of Cash Flows
Chapter 8 Measuring & reporting cash flows pages 448-472 448 472 pages 484-489
1 1
Learning objectives
1. 2. 3. 4.
Explain why cash is important to the reporting entity Define cash and cash equivalents Distinguish between accrual- and cash-based transaction recognition Compare and contrast the roles of the four external financial reports (statement of financial performance, statement of financial position, statement of changes in equity and statement of cash flows) Discuss the three components of the statement of cash flows (operating activities, investing activities, financing activities)
5.
2
Learning objectives
6. 7. 8. 9. 10.
Identify non-cash transactions Recognise the alternative approaches to preparing a statement of cash flows Prepare a simple statement of cash flows Prepare a reconciliation of net p p profit to cash flow from operations p Explain how the statement of cash flows can be useful for identifying cash flow management strengths, weaknesses and opportunities
3
1
18/04/2013
The importance of cash and cash flow
• •
Cash is king ! Cash is important because organisations and people will not normally accept any other form of settlement of claim Businesses fail as a result of their inability to find sufficient cash to settle their responsibilities These factors make cash the critical business asset and, therefore, the one analysts and others watch carefully in assessing survivability of the business
Profitable business fail all the time. Accruel accounting gives you better information of greater business Gd
•
Statement of cash flows: bank rec from the
•
4
Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 9781442534803/Atrill/Accounting: An Introduction/5th edition
The importance of cash and cash flow
•
The statements of financial position, statement of financial