会计专业英语 工业和信息化高职高专“十二五”规划教材立项项目 作者 孙晓媛 10.pptVIP

Accounting English Accounting English Less ten the statement of cash flows Learning objectives 1．Meaning of “cash flows” 2．Categories of cash flow 3．Direct and indirect methods of reporting Less ten the statement of cash flows Words and phrases Less ten the statement of cash flows 10.1 The Role of Cash Flow Statement 10.1.1 Meaning of “Cash Flows” The statement of cash flows reports the cash receipts, cash payments, and net change in cash resulting from operating, investing, and financing activities during a period. The statement of cash flows is generally prepared using “cash and cash equivalents” as its basis. Less ten the statement of cash flows 10.1.2 Importance of Cash Flow Statement Many business owners disregard the importance of cash flow statements because they unwittingly believe that their current financial standing can be construed from other financial reports and projections. Unfortunately, however, a cash flow statement is necessary to adequately assess the incoming and outgoing flow of cash and other resources in a business. Less ten the statement of cash flows 10.2 Categories of Cash Flow The statement of cash flows classifies cash receipts and disbursements as operating, investing, and financing activities. Both cash inflows and cash outflows are included within each category. 10.2.1 Operating Activities Operating activities include all transactions and other events that are not defined as investing or financing activities. Operating activities include selling to customers, acquiring and selling inventory, and acquiring and using labor. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income. Less ten the statement of cash flows 10.2.2 Investing Activities In this section, we determine the cash inflows and outflows associated with purchase and sale of a company’s noncurrent assets. It is usually the second section in the statement. Cash flows from in