[Anonymous]

Could anyone help me keep clear the differences between these? I get killed on questions asking me to tell what goes into each section and I feel like they should be easy points. Thanks in advance!

[Lidis]

I assuming that you asking for the statement of cash flows in a a profit organization because is also statement of cash flows in governmental accounting in funds financials statement (Proprietary Funds). Wiley in Module 17 Statement of Cash Flows has a very good description of the type of activities that goes into the statement of cash flows.

[Anonymous]

Just curious what review materials you're using? Cindy from Yaeger has several tricks up her sleeve to make remembering stuff easier that's a lot better than the Becker mnemonics.

I can look it up in my materials tomorrow if you don't get an answer tonight. I can't remember exactly what it was, but it had to do with matching up the 3 sections of the cash flows to the financial statements.

[mopena14]

I agree, I have FAR in a week and always mix these three items up, any help would be amazing.

BEC 73, 71, 79 (1/3/12)
AUD 48, 70 (1/31/12), 85 (4/9/12)
REG 70, 61, 77 (2/29/12)
FAR 42, 74 (5/29/12), 80 (7/16/12)
Ethics - 98 (4/20/12)
Officially a CPA (8/9/12)

[Anonymous]

For indirect method of operating activities

Cash from Operating activities is cash received/disbursed from normal operating activities. So, look at your income statement, and look at the activities that affect “income from continuing operations” You also have to adjust for gains and losses for certain transactions.

Investing activities are those activities that affect the ASSETS of your A = L + E equation. So if you disbursed money for a bond receivable, then you have cash outflows for investing activities because bonds receivable is an asset. If you bought or sold property plant or equipment, you are selling off/buying an asset. Any activity affecting assets is classified as investing activities.

Finance activities are those activities that affect liabilities or equity. So if you sold stock for cash. You increase your equity. If you borrowed money, you increase your liabilities, and so that would be cash receipts from finance activity. If you payed off debt, you decrease your liability, and that would be a finance activity.

So ask yourself these questions.

Does this transaction involve cash?

If so, is it cash receipt/disbursment from normal operations

If not, did I disburse cash to acquire an asset. Did I receive cash from selling asset. If so then it is an investing activity.

If not, did I disburse cash to decrease my liability/equity. Did I receive cash from taking on debt, or increase equity. If so then it is a finance activity.

I hope this helps.

[Author]

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