Statement of Cash Flows: Operating Activities Example - Financial Accounting video

The Statement of Cash Flows is unmistakably the most difficult of the financial statements to prepare. With three sections, operating activities, investing activities, and financing activities, students often find the statement of cash flows to be a bit challenging to master. In financial accounting, students first have to assimilate to the idea of accrual accounting where revenues are recorded when earned and expenses are recorded when incurred (revenue recognition principle and matching principle). When students finally have this topic down they are asked to complete the statement of cash flows which only represents cash inflows and outflows (the opposite of accrual accounting). Therefore, instead of taking balances from the ledger accounts and placing them on a financial statement (i.e. balance sheet, income statement) we have to look at the changes in the account balances (i.e. change from beginning balance to ending balance). - see the rest of this blog entry at www.TheAccountingDr.com. -- Thank you all for your wonderful support. Because of your support we have been able to reach and help numerous accounting students. Please continue to be a part of our mission to help other accounting students be successful by giving our videos thumbs up, giving comments and adding our videos to your favorites. Subscribe: http://www.youtube.com/subscription_center?add_user=routhwsuedu Like me on Facebook and post your questions/topics of interest: http://www.facebook.com/TheAccountingDoctor -- For more accounting/how to eLectures (and accompanying lecture notes) similar to Statement of Cash Flows: Operating Activities Example video, blog, FAQs and accounting eBooks visit http://www.TheAccountingDr.com. Statement of Cash Flows: Operating Activities Example - Financial Accounting video: http://youtu.be/Kh1dLLKn4fU -- Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad). If you are having difficulty viewing this video on YouTube, these videos may also be viewed without Flash on my website at http://www.TheAccountingDr.com.

Comments

1. Thank you very much Dr.Brian Routh for this video.
2. how about stock it will increase or decrease
3. You would add any increases to unearned revenues in the operating activities section. If unearned revenues decrease, this means you have now earned the cash that you previously received and would subtract any decreases in unearned revenues in the operating activities section of the statement of cash flows.
4. Unearned revenue is a current liability account and is analyzed in the operating activities section of the statement of cash flows. If unearned revenues increase that means you have received cash that you have not yet earned and does not yet appear in net income. If unearned revenues decrease then you have earned cash that you previously received in advance.
5. how about increase in unearned revenue?
6. Thank you for watching my video on the statement of cash flows: operating activities example. This video is specific to the operating activities only. However, to answer your question, once you have computed the cash provided/used by operating, investing and financing activities, you would sum the three sections. This number represents the change in the cash for the period covered. If you take the change that you computed and add that to the beginning cash balance you should find ending cash.