Page 19 - DCOM302_MANAGEMENT_ACCOUNTING

Management Accounting

Notes 5. Statement of Cash Flows: Statement of cash flows reports on a company’s cash flow over a

period of time. The cash flow may be from many activities of a firm involving particularly

its operations, investment and fi nance.
Example: Sample Cash Flow Statement

Sample Business Plan
Sample Cash Flow Statement
Statement for the Month Ended_________.

Cash Flow From Operating Activities
Net Income 1,800
Non-cash Expenses and Revenues
Include income
Increase in Accounts Receivable 1,000
Increase in Supplies 500
Increase in Accounts Payable 600 (900)
Net Cash Flow from Operating Activities 900
Cash Flows From Investing Activities
Purchase of land (10,000)
Purchase of Building (25,000)
Net Cash Flow used by Investing Activities
Cash Flow Financing Activities
Invested 50,000
Withdrawals (600)
Net Cash Flow Provided by Financing Activities 49,400
Net Increase (Decrease) in Cash 15,000
For large corporations, these statements are often complex and may include an extensive
set of notes to the financial statements and management discussion and analysis. The

notes typically describe each item on the balance sheet, income statement and cash fl ow
statement in further detail. Notes to financial statements are considered an integral part of

the fi nancial statements.
Self Assessment

Fill in the blanks:
1. Income statement is also called profit and loss statement (P&L) and ……………………

2. The purpose of the …………………… is to show managers and investors whether the
company made or lost money during the period being reported.
3. A retained earnings statement explains the …………………… in a company’s retained
earnings over the reporting period.

4. The …………………… provides an insight into the financial status of a company at a
particular time.
5. The cash flow may be from many activities of a firm involving particularly its operations,

…………………… and fi nance.
2.2 Form and Contents of Financial Statements

The following are some important forms and their contents of fi nancial statements:

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