Archive for May, 2006
Does the indirect method of accounting deal with not only cash even though it is a cash flow statement?
Yes asked:
Why do things like accounts payable and change in prepaid rent, inventory, and receivables show up in the statement of cash flows under the indirect method? Aren’t only quantities involving a direct transfer of cash supposed to be listed? Aren’t cash flow statements only supposed to list cold, hard, cash transactions, or can they include accrued items as well?
Eugene
Why do things like accounts payable and change in prepaid rent, inventory, and receivables show up in the statement of cash flows under the indirect method? Aren’t only quantities involving a direct transfer of cash supposed to be listed? Aren’t cash flow statements only supposed to list cold, hard, cash transactions, or can they include accrued items as well?
Eugene
