May 8, 2020 at 4:35 pm #2997900NgParticipant
I don't know how to study far for example in cash flow statement I memorize that an increase in receivable deductied from income but when another question come and has a new item I dont know what to do with itMay 8, 2020 at 4:53 pm #2997918ReckedParticipant
You can't just memorize this unfortunately. You need to understand the concepts behind it.
I remember having a really hard time with this as well, and ended up watching the videos over and over again and working the problems step by step along with the video. Then I thought I had it, and got it all wrong and started over yet again. Eventually I had it down pretty good. The T accounts method was very helpful to me. You might be able to find some Roger videos on this on youtube to help you out.
Here's a 30+ minute video
and here's a link to the youtube channel
Good luck, it was tricky for sure.May 8, 2020 at 4:53 pm #2997921ReckedParticipant
this video really takes me back.
i must have watched this more than 5 times.
so glad to be doneMay 8, 2020 at 5:01 pm #2997939NgParticipant
I watched it but I cant seem to understand it
Why the account paypale different between direct and indirect methodMay 8, 2020 at 10:54 pm #2998194monikerncParticipant
Go with the master: Alan Mursau, who has now passed away. The man got me through 3 semesters of intermediate and BEC. Many standards have changed since he last posted but most of his videos remain relevant. He is the king of DV-LIFOMay 8, 2020 at 11:05 pm #2998233TncincyParticipant
@Recked those roger videos helped me a lot when I struggled with statements of cash flows. The key for me was to listen, take notes, listen, take notes and do the questions over and over again. Even though I have not studied statement of cash flows in a while, I can still answer those questions. I think some videos are worth it. Taking good notes help not to have to go to the videos again, but hey if you have to you have to.May 9, 2020 at 9:56 am #2998416CPAHOPEParticipant
What is the difference between the direct method and the indirect method for the statement of cash flows?Main Difference between Direct and Indirect Method of SCF
The main difference between the direct method and the indirect method of presenting the statement of cash flows (SCF) involves the cash flows from operating activities. (There are no differences in the cash flows from investing activities and/or the cash flows from financing activities.)
Under the U.S. reporting rules, a corporation has the option of using either the direct or the indirect method. However, surveys indicate that nearly all large U.S. corporations use the indirect method.
Example of the Indirect Method of SCF
When the indirect method of presenting a corporation's cash flows from operating activities is used, this section of SCF will begin with a corporation's net income. The net income is then followed by the adjustments needed to convert the accrual accounting net income to the cash flows from operating activities. A few of the typical adjustments are:
Adding back depreciation expenseAdding the decrease in accounts receivableDeducting the increase in inventoryDeducting the decrease in accounts payableAdding the increase in accrued expenses payableExample of the Direct Method of SCF
When the direct method of presenting a corporation's cash flows from operating activities is used, the amount of net income is not the starting point. Instead, the direct method lists the cash amounts received and paid by the corporation. Here are a few of the more common descriptions that will be seen under the direct method:
Cash from customersCash paid to employeesCash paid to suppliersCash paid for interest
The direct method also requires a reconciliation of net income to the cash provided by operating activities. (This is done automatically under the indirect method.)
Free Financial Statements Cheat Sheet
Is the direct method still used in the statement of cash flows?Why is an increase in inventory shown as a negative amount in the statement of cash flows?What is cash from operating activities?Why is Interest Expense Included in the Operating Activities Section of the Cash Flow Statement?What is a cash cow?Where is interest on a note payable reported on the cash flow statement?
To learn more, see the Related Topics listed below:
Cash Flow Statement
Related Business Forms
Statement of Cash Flows: Corporation, Indirect Method
Statement of Cash Flows: Sole Proprietor, Indirect Method
Join PRO or PRO Plusand Get Lifetime Access to Our Premium Materials
Read all 2,112 Testimonials
PRO PlusLifetime Access
Quick Tests with Coaching
All PDF files
Certificate – Debits and Credits
Certificate – Adjusting Entries
Certificate – Financial Statements
Certificate – Balance Sheet
Certificate – Income Statement
Certificate – Cash Flow Statement
Certificate – Working Capital
Certificate – Payroll Accounting
About the Author
Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com
About Us About Quick Tour Testimonials Contact Sitemap
Materials Bookkeeping Quizzes Quick Tests Flashcards Crossword Puzzles Word Scrambles Q&A Dictionary Visual Tutorials Cheat Sheets Seminar Videos Business Forms Certificates
Copyright © 2020
AccountingCoach, LLC. All rights reserved.
AccountingCoach® is a registered trademark.May 14, 2020 at 1:54 am #3001806Peach368Participant
Thanks CPAHOPE. Very helpful, refreshed my memory on a forgotten concept.