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23 Cards in this Set
- Front
- Back
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provides the net change in the cash balance of a company for a period This helps owners see if their revenues are actually translated to cash collections or if they have enough cash inflows in order to pay any maturing liabilities |
Statement of cash flows |
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It is a basic component of the financial statements summarizing the operating investing and financing activities of an enterprise |
Statement of cash flows |
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Cash inflows may come from ( |
1) cash sales to customers, (2) collection of customer accounts, (3) loans and other borrowings, and (4) owners contributions |
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cash outflows may be for payments of |
1) business expenses. (2) purchases of inventories and other assets (3) liabilities to creditors, and (4) dividends to owners |
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are related to the main revenue-producing activities of the business. |
Operating activities |
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Cash transaction related to acquisition and disposal of long-term assets such as property, plant, and equipment, and intangible assets are classified |
Investing activities |
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cash transactions with equity owner's and creditors are reported |
Financing activities |
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transactions that enter the determination of net income |
Operating activities |
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transactions involving the acquiring and disposal of non-current assets |
Investing activities |
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transactions involving borrowing or repaying creditors and transactions with the owner |
Financing activities |
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Statement of cash flows can be presented either by |
Direct / indirect method |
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the entity's net cash provided by (used in) operating activities obtained by adding the individual operating cash inflows and then subtracting individual operating cash outflows. |
Direct method |
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derives the net cash provided by (used in) operating activities by adjusting the profit for income and expense items not resulting from cash transactions. |
Indirect method |
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contain information in addition to the presented in the statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flow |
Notes to financial statements |
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Each item on the face of the balance sheet, income statement, statement of changes in equity and cash flow statement shall be ______ to any related information in the notes |
cross-referenced |
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Its purpose is to provide the necessary disclosures required by Philippine Financial Reporting Standards. |
Notes to financial statements |
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Presentation and Disclosure in the notes to financial statements normally presented in the following order to assists users in understanding the financial statements and comparing them with financial statements of other entities |
A. A statement of compliance with PFRS B. A summary of significant accounting policies applied C. Supporting information for items presented in the financial statements D. Other disclosures |
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An entity whose financial statements comply with PFRS shall make an explicit and unreserved statement of such compliance in the notes |
A statement of compliance with PFRS |
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It can be observed in the first statement of the note that the business has made an explicit statement as to its compliance with the Standards |
A statement of compliance with PFRS |
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Accounting policies are the specific principles, methods, practices, rules, bases and conventions adopted by an entity in preparing financial statements |
A Summary of Significant Accounting Policies Applied |
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are the specific principles, methods, practices, rules, bases and conventions adopted by an entity in preparing financial statements |
Accounting policies |
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The elements comprising the line items that appear in the financial statements are disclosed in the notes |
Supporting Information for Items Presented in the Financial Statements |
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PFRS |
Philippine financing reporting standards |
