COMMERCE 1AA3 Chapter Notes - Chapter 10: Cash Flow, Net Income, Accrual

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Aadil Merali Juma

Document Summary

Income statement: reports a company"s revenues, expenses, and net income but because it is prepared on an accrual basis, it provides limited information about how cash flows were affected by the company"s business activities during the reporting period. Income and cash flow usually move together because net income generates cash: sometimes they show different patterns. Ifrs and aspe offer different guidance on classifying cash flows related to interest and dividends. Two methods of determining cash flows from operating activities. Ifrs and aspe suggest that the direct method provides the most useful information to users: this practice is rarely ever used. Prepare a statement of cash flows using the indirect method of determining cash flows from. Decreases in operating current assets other than cash. Increases in operating current assets other than cash. Sale of investments that are not cash equivalents. Collecting on loans and advances to others. Purchase of investments that are not cash equivalents.