ACCTG 102 Lecture Notes - Lecture 22: Cash Flow Statement, Treasury Stock, Cash Flow
Document Summary
One reason for oh variances is over and underspending. For example, paying higher wages for indirect labor. The responsibility for this rests with production department. For example, because of poor maintenance, the machines are breaking down leading to reduced production. This would also be the responsibility of production. Overhead can also be underealized because of a lack of sales orders. When the cause is lack of sales orders the responsibility rests outside the production department. Purpose of the statement of cash flows: primary purpose- the statement of cash flows is to provide information about cash receipts and cash payments of an entity during a period. The statement of cash flows reports cash receipts, payments, and the net change in cash resulting from operating, investing and financing activities. Gives investors, creditors and others information about what is happening with the company"s most liquid resource: cash. Classified into 3 sections: operating activities- involve income determination (i/s) items.
