Wiley CPAexcel Exam Review 2014 Study Guide, Financial Accounting and Reporting

Module 17: Statement of Cash Flows

Overview

The primary purposes of the statement of cash flows are to provide information about an entity’s cash receipts and cash payments and to disclose information about the financing and investing activities of an entity. As such, the statement divides cash receipts and cash payments into three sections: operating, investing, and financing.

1. Operating activities include delivering or producing goods for sale and providing services. Generally, operating activities are related to net income and the current asset and current liability sections of the balance sheet.

2. Investing activities include the acquisition or disposition of long-term productive assets or securities. Investing activities are generally related to the noncurrent section of the balance sheet.

3. Financing activities include obtaining resources from creditors and repaying amounts borrowed. Generally, financing activities are related to the noncurrent liability and equity sections of the balance sheet.

A. Objectives of the Statement of Cash Flows

B. Statement of Cash Flows Classification

C. Direct or Indirect Presentation in Reporting Operating Activities

D. Example of Statement of Cash Flows

E. Capital Leases

F. Research Component—Accounting Standards Codification

G. International Financial Reporting Standards (IFRS)

Key Terms

Multiple-Choice Questions

Multiple-Choice Answers and Explanations

Simulations

Simulation Solutions

This module also covers the two methods of presenting ...