Cash Flow

Question 1

Method of presenting cf

Answer 1

1. Direct method - encouraged method - for operating = cash received from customers - cash paid

Still need recon for us gaap

2. Indirect method reconciliation from net income

Differences are related to operating activities

Question 2

Cash flows from operating activities

Answer 2

1. Cash from customers
2. Dividend income
3. Cash paid for business expense
   4 interest income and expense

Question 3

Cash flow from investing

Non current assets

Answer 3

Purchase or sale of investments or long lived assets (pp&e)

Making!!! Loans making!!!

Question 4

Cash flow from financing activities

Answer 4

Issuing and selling stock
Purchase the
Getting a loan getting
Paying dividend paying
Issuing bond

Question 5

Direct method equations for operating activities

1. Cash from customer
2. Interest received no equation
3. Dividend received no equation
4. Other cash proceeds ie insurance ir legal proceeds
5. Cash received from sale of tradin security only
   6 cash paid to suppliers and employees
6. Interest paid
   8 income tax paid
7. Cash paid to obtain trading securities
   10 other operating cash pmts - equation

Answer 5

1. Revenue
   +decrease in ar (collect) or - increase in ar (not yet collected)
   + increase unearned revenue (collect not earned) or - decrease unearned revenue (performed)

6. COGS
\+ increase inventory (buying) or - decrease in inventory (selling inflow)
- increase in ap  ( borrowing)
\+ decrease in ap (repay)
= cash paid to suppliers

Salary and wages
- increase in wages payable
+ decrease in wage payable
= cash paid to employees

10 other op expense
- increase in accrueds
\+ decrease accrued
\+increase prepaid
- decreaseprepaids

10.

Question 6

Indirect method cash flow

Indirect = income statement

Answer 6

NI
\+deprec and amortization
\+ losses
- gains amortization bond premiums 
- equity earnings
- increase in oa or + decrease in oa
- decrease in ol or + increase in ol

Clad 
Ca or cl
Loss and gain
Amortize deprec 
Deferred items

Question 7

Idea differences for classifying cash flow items

Answer 7

1. Interest received
   gaap- cfo Ifrs - cfo or cfi
2. Interest paid
   Gaap cfo. Ifrs - cfo or CFC
3. Dividends received
   Gaap cfo. Ifrs cfo cfi

4 dividends paid
CFf. Cfo cff

5. Taxes
   Gaap cfo ifrs all 3

Ifrs paid = cfo or CFC
Receive cfo cfi