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Financial statement (view source)
Revision as of 19:57, February 23, 2018
, 19:57, February 23, 2018add final section (statement of cash flows)
The statement may be shown as a separate schedule, or may be combined with the balance sheet (the most common) or the income statement.
The statement may be shown as a separate schedule, or may be combined with the balance sheet (the most common) or the income statement.
==Statement of Cash Flows==
The '''statement of cash flows''' shows how changes in the income statement and balance sheet affect the cash and cash equivalents of an entity. The statement is broken down into three areas: '''operating''', '''investing''', and '''financing'''.
The operating section is the largest of the three, as it shows cash earned from and used by the entity's operations. Items in this section include:
*Cash sales
*Receipts from accounts receivable (whether held by the company or received from credit card companies)
*Purchases of items for resale
*Purchases of raw materials and other items used in manufacturing
*Payments on accounts payable
*Salaries, wages, commissions, and bonuses paid during the year
*Other general and administrative expenses paid during the year
*Interest payments (required in this section under United States Generally Accepted Accounting Principles)
The investing section includes such items as:
*Purchases of property, plant, and equipment
*Sales of assets no longer used in operations
*Purchases or sales of entities (or portions thereof) related to mergers, acquisitions, or divestitures
The financing section includes such items as:
*Loans received from borrowers, and repayments thereon
*Payments made on capital leases
*Dividends paid
*Sales or repurchases of company stock
*
[[Category:Accounting]]
[[Category:Accounting]]