Archive about 'Cash Flow & Cash Flow Statement'

Explain briefly the steps in preparing Cash flow statements using the indirect method

Tweet Below are tabulated the various basic steps to prepare cash flow statement using the indirect method: Basic steps using indirect method to prepare cash flow statement:  Set out the proforma cash statement with the headings required by accounting standard. Leave plenty of space. Ideally use three or more sheets of paper, one for the […]

In the Indirect Method of Cash Flow Statements, explain the reasons for certain items added and subtracted

Tweet Below are the reasons for certain items added and subtracted using the indirect method to prepare a cash flow statement:- Example of items added using the indirect method in preparing cash flow statement: DEPRECIATION is not a cash expense which was originally deducted from the profit figure in the income statement. Therefore it is […]

What are the advantages and disadvantages of Cash flow accounting

Tweet Append below are the advantages and disadvantages of cash flow accounting:- ADVANTAGES of cash flow accounting:(a) Cash flow accounting critically looks at a company ABILITY TO GENERATE CASH. Without cash, a company cannot survive (b) Cash flow is more “direct” as “profit” is highly dependent on accounting conventions and concepts/principles (c) Cash flow reporting […]

Format Of The INDIRECT METHOD of Cash Flow Statement (FRS 107)

Tweet Earlier article is on the format of the Direct method. Append below is the INDIRECT method commonly used by many companies to present their cash flow statements. { Click here to go to Content Page on All other articles on commonly used ACCOUNTING REPORTS FORMAT }

Format Of Direct Method Of Cash Flow Statement ( FRS 107)

Tweet Below is the format or presentation of the Direct method of cash flow statement. If the direct method is used, then the entity needs to disclose in the notes a statement reconciling the cash flows from operations to the net profit from the income statement for the period. { Click here to go to […]

How To Improve Tight Liquidity Or Cash Flows Situation of a business

Tweet My company is in very tight cash flow situations. Can you tell me how to improve the company’s present tight cash flow situations? Without the right level of liquidity ( cash is not equal to profit), a company might be not able to survive. Hence, the company’s first task is to improve its cash […]

List Of Topics Under The Heading Of Cash Flow Statement

Tweet Click to the respective topic: Content Page On CASH FLOW STATEMENT 1.0 Basic understanding of Cash Flow Statement 2.0 What is in the Cash Flow Statement? 3.0 What is Cash flow And Why it is so Important? 4.0 Managing Cash flows – Steps To Improve Cash flows 5.0 OTHERS: Profit Versus Cash Concept Cash […]


Tweet Salient points: 1.0 Cash is the standard for measurement and accounting and requires special procedures to assure that proper physical and accounting control is maintained. Temporarily available excess cash is often invested to generate revenue from an otherwise unproductive assets 2.0 Whether it should be included as cash is often based on whether the […]

Answer Paper On CF No1:Statement of Cash Flow Classification

Tweet Answer to Test Paper CF No. 1 Test On Statement of Cash Flow Classification   (1) Operating activities Payment to suppliers of inventory (2) Financing activities Payment of cash dividends to shareholders (3) Investing activities Proceeds from the disposal of plant and equipment (4) Operating activities Receipt of interest on a note receivable (5) […]

What Is In The Cash Flow Statements?

Tweet In my earlier article, I have explained the needs to understand the Cash Flow Statements. SO WHAT IS IN A CASH FLOW STATEMENT? Basically comprise the following: Closing Cash Balance  (a) Opening Cash Balance (b) Net Change of Cash Balance ( c ) = (a-b) ( Cash balance also includes cash equivalent(refer to my […]