ACCTMIS 2200
Statement Of Cash Flow
●Statement of cash flows – shows the changes in cash for the same period of time as
that covered by the income statements. The cash flow statement shows all sources of
cash and all of the uses of cash.
● It provides information about:
○ Cash receipts (inflows)
○ Cash payments (outflows)
●Question: How does the statement of cash flows differ from other major financial
statements?
○Answer: The other financial statements (ie the income statements and balance
sheet) are based on accrual accounting (the realization principle and matching
concept) whereas the cash flow statement simply shows all of the increases and
decreases in cash.
● These cash inflows and outflows are categorized as either:
○ Operating Activities – includes the cash inflows and outflows related to the
normal course of business operations. Depreciation is the only non-cash
expense.
○ Investing Activities – Includes the cash inflows and outflows related to the
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