3.10 Statement of cash flows Flashcards
1
Q
What information does the cash flow statement provide?
A
Changes in cash and cash equivalents over the accounting period.
2
Q
What items constitute cash and cash equivalents?
A
- cash in hand
- cash at bank
- short term investment
- bank overdrafts
3
Q
What is the structure of the statement of cash flows:
A
- cash receipts from customers
- cash paid to suppliers
- cash paid to employees
- interest paid
- taxes paid
- cash generated from operations
4
Q
What is a debenture?
A
A written acknowledgement of debts used by large companies to borrow money at a fixed rate of interest.
5
Q
What is a bond?
A
A fixed income investment where an investor loans money to an entity for a defined period at a fixed interest rate.
6
Q
What is the role of IAS 7?
A
Governs the preparation and presentation of cash flow statements.
7
Q
How is the indirect method of cash flow calculation carried out?
A
1 Start with net income
2 Add back depreciation
3 Calculate changes in balance sheet items.
