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Article: The Workings of The Statement of Cash Flows.
- Article from:
- Business Credit
- Article date:
- September 1, 2001
- Author:
CopyrightCOPYRIGHT 2001 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Question: How does the Statement of Cash Flows tie into the other financial statements?
Answer: The Statement of Cash Flows is the cash reconciliation of the activity on both the Balance Sheet and the Income Statement.
Both laymen and accountants who do not work regularly with the Statement of Cash Flows sometimes find that of all the financial statements, the Statement of Cash Flows is the most misunderstood and confusing.
The Statement of Cash Flows was actually the last statement to be added to financial statements. In 1987, the Financial Accounting Standards Board issued the Statement of Financial Accounting Standards (FASB) No. 95 entitled ...