中南财经政法大学：《中级会计学 Intermediate Accounting》课程电子教案（PPT课件讲稿，英文版）Chapter 5 The Statement of Cash Flows

Intermediate Accounting 5 The Statement of Cash Flows Direct ethod This method reports directly the major classes of operating cash receipts and payments of an entity during a period Accrual-basis revenues and expenses must be converted to equivalent cash receipts and payments The amount of cash actually collected or paid is determined

Direct Method Intermediate Accounting 5 The Statement of Cash Flows ➢ This method reports directly the major classes of operating cash receipts and payments of an entity during a period. ➢ Accrual-basis revenues and expenses must be converted to equivalent cash receipts and payments. ➢ The amount of cash actually collected or paid is determined

Intermediate Accounting 5 The Statement of Cash Flows Direct Method Example: Cash Receipts Sales and cash collected from customers Beginning accounts receivable $50 sales 160 Cash available for collection $210 Ending accounts receivable 70 Cash collected from customers $140

Direct Method Example: Cash Receipts Intermediate Accounting 5 The Statement of Cash Flows Sales and Cash Collected from Customers: Beginning accounts receivable $ 50 + Sales 160 = Cash available for collection $210 - Ending accounts receivable 70 = Cash collected from customers $140