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Bookkeeping All-In-One For Dummies by Consumer Dummies

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Chapter 6

The Statement of Cash Flows

In This Chapter

arrow Exploring the statement of cash flows

arrow Understanding operating activities

arrow Getting a grip on investments

arrow Figuring out the financing section

arrow Looking at other line items

arrow Finding net cash from all company activities

Cash is a company’s lifeblood. If a company expects to manage its assets and liabilities and to pay its obligations, it has to know the amount of cash flowing into and out of the business, which isn’t always easy to figure out when using accrual accounting. (You can find out more about accrual accounting in Book I Chapter 1.)

The reason accrual accounting makes it hard to figure out how much cash a company actually holds is that cash doesn’t have to change hands for the company to record a transaction. The statement of cash flows is the financial statement that helps the financial report reader understand a company’s cash ...

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