E describe how the cash flow statement is linked to the income statement and the balance sheet;

Question 1

What’s the CF statement do? It reconciles. Reconciles what?

Answer 1

The CF statement reconciles the beg + ending balances of cash over an accounting period. Changes in cash to CF statement are a result of investing, operating, financing

AKA

Op+Inv+Fin = changes in cash balance
Change in Cash balance + Beg. cash balance = ending cash balance

Question 2

Op act translation to NI

Answer 2

CA and CL or those day to day things (in order of liquidity)

Cash and cash equiv. Mrktbl sec, A/R, Inv, other(prepaid exp, deferred tax assets)

CL’s: Accts P, notes payable and portions of long term debt, accrued liabilities, unearned rev

Question 3

Inv translation to NI

Answer 3

noncurrent assets (which provide information about investment activities) (*which forms the foundation upon which the firm operates)
PPE, inv. prop., intangibles, goodwill

Question 4

Fin activity trans to NI

Answer 4

noncurrent liabilities and equity