Consult on the correct method of compiling the cash flow statement it is operational .

Hello, now I am here to answer the above questions for you. The basis and method of compiling the cash flow statement, the preparation of the cash flow statement with me, I believe that many friends still do not know, now let's take a look at it..

Hello Zao, now I will answer the above questions for you. The basis and method of compiling the cash flow statement, the preparation of the cash flow statement is not known to many of my friends, now let's take a look!

1. In fact, the preparation of the cash flow statement is simple.

2. It is to first take the current macro bureau and bank deposits as project management.

3. Then classify the cash and bank deposits when making the voucher and enter the corresponding items of cash flow.

There are two ways to prepare a cash flow statement, which are direct and indirect. The cash flow statement is a financial statement that reflects the impact of business activities, investment activities and financing activities on its cash and cash equivalents in a certain period of time, and can be divided into three activity classifications according to its use, namely investment, operation and financing.

The main function of the cash flow statement is to determine the short-term viability of the company, especially the ability to pay bills.

1. Direct law.

The direct method reflects the cash flow from the operating activities of the enterprise through the umbrella classification of cash receipts and cash expenditures. Generally, the operating income in the income statement is used as the starting point to adjust the increase and decrease of items related to operating activities, and then the cash flow generated by operating activities is calculated.

2. Indirect method.

1. It refers to the calculation of cash flow generated by operating activities based on net profit, adjusting income, expenses, non-operating income and expenditure and other related items that do not involve cash, excluding the impact of investment activities and financing activities on cash flow.

2. Since the net profit is determined on the accrual basis, and includes the income and expenses related to investment activities and financing activities.

3. Adjusting net profit to cash flow from operating activities is actually adjusting the net profit determined according to the accrual principle to net cash inflow, and excluding the impact of investment activities and financing activities on cash flow.

The method of preparation of the cash flow statement is mainly for the preparation of cash flow from operating activities. There are two ways to prepare cash flows from operating activities, one is the direct method and the other is the indirect method.

The so-called direct method reflects the cash flow from operating activities through the blanket classification of cash income and cash expenditure. When the direct method is used to prepare the cash flow of operating activities, the information about cash income and cash expenditure can be obtained directly from the accounting records, or on the basis of the data of operating income, operating costs, operating expenses and other data in the income statement, it can be obtained by adjusting the changes related to the items of operating activities, that is, by adjusting the following items:

First, changes in inventories and operating receivables and payables for the period;

second, depreciation of fixed assets, amortization of intangible assets and other non-cash expenditure items;

Third, other items that do not belong to the cash flow from operating activities.

When the direct method is used, there are two types: the working paper method and the direct calculation method.

The indirect method reflects the cash flow from operating activities by adjusting for the impact of non-cash transactions, deferred or accrued items of cash income or expenses arising from past or future operating activities, and income or expense items related to or financing cash flows on net profit or loss. The indirect method uses the net profit on the income statement as a starting point to obtain the cash flow from operations by adjusting certain related items. These items that need to be adjusted can be divided into three categories:

Category 1: Gains or losses included in net profit but unrelated to operating activities, such as gains and losses from fixed assets;

Category 2: Items that affect net profit but are not related to cash receipts and expenditures, such as depreciation of fixed assets, provision of expenses, etc.;

Category 3: Items that are not related to net profit but are related to cash, such as the purchase of inventory, payment of arrears, receipt of deposits, etc.

The main advantage of the direct method is that it shows the specific content of the inflow and outflow of each item of the cash flow of operating activities, compared with the indirect method, it can more comprehensively reflect the overall picture of cash receipts and expenditures in a certain period, and the information it provides is helpful for future cash flow, which helps to reveal the ability to pay debts, the ability to pay dividends, and the ability to pay dividends. The advantage of the indirect method is that it helps to analyze the reasons that affect cash flow by revealing the difference between net profit and net cash flow, and then analyze the quality of net profit from the perspective of cash flow. Therefore, on the one hand, the "Accounting System" promulgated by China requires the preparation of the cash flow statement according to the direct method, and on the other hand, it requires the information on the adjustment of net profit to the cash flow of operating activities by the indirect method in the "supplementary information" of the cash flow statement, thus taking into account the advantages of the two methods.

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