Professional Documents
Culture Documents
Understanding
Accounting and
Financial Statements
Edited by
Hector Martin
Public Accountants
Provide accounting services to
individuals or business firms for a fee
Management Accountants
Provide timely, relevant, accurate, and
concise information that executives
can use to operate their firms
and
Provide snapshot of
firms financial
position
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In general,
an increase in an asset account = use of cash
a decrease in an asset account = source of cash
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4.
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Uses of Cash
Increase in inventory =
$148.50
Sources of Cash
Decrease in an asset
account
Increase in a liability
account
Uses of Cash
Increase in an asset
account
Decrease in a liability
account
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Operating activities represent the companys core business including sales and
expenses. Basically any activity that affects net income for the period.
Investing activities include the cash flows that arise out of the purchase and sale
of long-term assets such as plant and equipment.
Financing activities represent changes in the firms use of debt and equity such
as issue of new shares, payment of dividends.
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