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Business

Accounting

Discuss the importance of reporting the transactions of cash flows in the correct period for a cash based business.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 14EB: Use the following excerpts from Indira Companys Statement of Cash Flows and other financial records...

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Question

Discuss the importance of reporting the transactions of cash flows in the correct period for a cash based business.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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