Team C Week 4 Summary
David Ramirez, Kelvin Hemmingway, Chad Etzler
August 26, 2013
Ins: James Covert
As we advanced through week 4 of Principles of Accounting II, so far, we have absorbed ourselves with a litany of accountancy material. Week 4 continued with variety of content that contained: identifying kinds of shares issued by companies, computing shares, dividends, and stock splits, and documenting treasury stock deals. Also discussed in text and throughout discussion questions was the use of cash flows and types. We also covered both vertical and horizontal analysis. Cash Flow and Shares
In any industry, have a clear picture of an organizations cash, and the flow of where it goes is an important part of a successful organization. Many organizations use different methods of accounting to view financial information. But some of the methods don’t provide certain information that is when the Cash Flow Statement comes into play. For example the balance sheet, income statement, and retained earnings statement only provide a limited amount of information regarding an organization cash flow (cash receipts and cash payments). For example, balance sheets will show the increase in property, plant, and equipment during a year. Although they do not show how the additions were financed or paid for. The income statement shows an organizations net income, it does not give a clue about the amount of cash generated by operating activities. Retained earnings statement shows cash dividends declared but not cash dividends that are paid during a year. What makes Cash Flow Statements so important is that they provide a detailed summary of where cash came from and how it was used compared to the other reports.
Statement of Cash Flows can be broken down into three categories; The Statement of Cash Flows: Usefulness and Format, Preparing the Statement of Cash Flows—Indirect Method, and Using Cash Flows to Evaluate a Company. Each is used to...
Weygandt, J.J., Kimmel, P.D., & Kieso, D.E. (2010). Financial accounting (7th ed.). Hoboken, NJ: John Wiley & Sons
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