Chapter 12 - Chapter 11 - Reporting and interpreting the statement of cash flows. In the previous chapters, you learned about the income statement, statement of retained earnings, and balance sheet. This chapter focuses on the fourth main financial statement - the statement of cash flows. | Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Fundamentals of Financial Accounting 3e by Phillips, Libby, and Libby. Chapter 12 Reporting and Interpreting the Statement of Cash Flows PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Fred Phillips, ., CA Chapter 12: Reporting and Interpreting the Statement of Cash Flows Operations Cash received and paid for day-to-day activities with customers, suppliers, and employees. Investing Cash paid and received from buying and selling long-term assets. Financing Cash received and paid for exchanges with lenders and stockholders. Business Activities and Cash Flows The Statement of Cash Flows focuses attention on: 12- The Statement of Cash Flows shows each major type of business activity that caused a company’s cash to increase or decrease during the accounting period. The major types of business activities are: Operations – The Statement of Cash Flows shows the cash received and paid for day-to-day activities with customers, suppliers, and employees. Investing – The Statement of Cash Flows shows cash paid and received from buying and selling long-term assets. Financing – The Statement of Cash Flows shows cash received and paid for exchanges with lenders and stockholders. Cash Checking and Savings Accounts Cash Equivalents Highly liquid short-term investments within three months of maturity. Business Activities and Cash Flows Currency 12- Part I Cash includes currency on hand. Part II Cash also includes checking accounts, savings accounts, and certain money market accounts. Part III The third component of cash is called cash equivalents. Cash equivalents are short-term, highly liquid investments that are easily converted into cash and that have very little risk of loss. An example of a cash equivalent would be a short-term Treasury Bill that is government issued, is within three months of its maturity . | Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Fundamentals of Financial Accounting 3e by Phillips, Libby, and Libby. Chapter 12 Reporting and Interpreting the Statement of Cash Flows PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Fred Phillips, ., CA Chapter 12: Reporting and Interpreting the Statement of Cash Flows Operations Cash received and paid for day-to-day activities with customers, suppliers, and employees. Investing Cash paid and received from buying and selling long-term assets. Financing Cash received and paid for exchanges with lenders and stockholders. Business Activities and Cash Flows The Statement of Cash Flows focuses attention on: 12- The Statement of Cash Flows shows each major type of business activity that caused a company’s cash to increase or decrease during the accounting period. The major types of business activities are: Operations – .
