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Concept Introduction: A cash flow statement is prepared to determine
The statement of cash flow using a direct method for reporting operating activity.
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Concept Introduction: A cash flow statement is prepared to determine cash inflow and outflow during a year. The cash flow statement is classified into three categories: cash flow from operating activity represents cash flow on account of main business operations, cash flow from investing activity represents cash flow from acquisition and disposition of long-lived assets, and cash flow from financing activity represents cash flow on account of borrowing, repayments of debt and issue of a share, payments of dividends.
The statement of cash flow using an indirect method for reporting operating activity.
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