Module 4 - Case
Statement of Cash Flows
The main purpose of this module is to review the statement of cash flows in more detail.
Is there a difference between direct and indirect methods to make a statement of cash flows? Discuss and note two or three specific differences. Additionally, clearly
- Distinguish between cash flows from operating activities and cash flows from investing activities.
- Compare the statement of cash flows with income statement, using terms of net income and cash at end of the year.
- Which of the two financial statements (income statement and statements of cash flows) is the better one? Explain your reasoning.
- Comment on the differences between Apple’s and Samsung’s statement of cash flows.
The submission should be 3- to 5-pages and need to include answers to all the questions listed above. Show formula for computations, compare two financial statements, discuss the results, and include references in APA format.
When your paper is done, submit it.
AICPA or the National Association of State Boards of Accountancy (NASBA).
Accounting Concepts and Principles (2015) Pearson Learning Solutions, New York
Accounting for McDonald’s (2015) Pearson Learning Solutions, New York
Accounting and the Business Environment (2015) Pearson Learning Solutions, New York
Baruch College, The University of New York (2008). Guide to Financial Statements. This is a 45-minute interactive video presentation with audio. It is an excellent introduction and overview of financial statements. You do not have to watch the whole presentation at one time since it is easy to restart at different points. The information is also available in a PDF file.
Benedicto, M.S. (2008) Introduction to Financial Accounting. IE Business School. A multimedia presentation. The information is also available in a PDF file. Click on “Financial Statements" tab and "Practical Example" tab. Retrieved from http://openmultimedia.ie.edu/OpenProducts/financial_accounting/financial_accounting/frames.html
Read the appropriate chapters in the following text(s):
Edwards, J.D. & Hermanson, R.H. (2007) Accounting Principles: A Business Perspective. First Global Text Edition, Volume 1. Financial Accounting, pp. 6 – 37. Retrieved from http://dl.dropbox.com/u/31779972/Accounting%20Principles%20Vol.%201.pdf
Walther, L.M. (2010). Principles of Accounting: A Complete Online Text, chapters 1 and 2. Retrieved from http://www.principlesofaccounting.com/
Whitehead, G. (2008). Success in principles of accounting. Hodder Education. (read units 1, 2, and 3). Retrieved from EBSCO.
Drake, P. (n.d.). Financial Ratio Analysis. Retrieved from http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf
SEC (2007). Beginner`s Guide to Financial Statements. Retrieved from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Tutor2u (n.d.) is another website with presentations/notes that explain some basic accounting concepts. Retrieved from http://tutor2u.net/sub_accounting.asp
Before you start the case you may want to try the quiz below to test your knowledge of accounting terminology. It is not graded and the answers are available.
Learn Accounting for Free. Accounting Basics Quiz | AccountingCoach.com, Retrieved from http://www.accountingcoach.com/online-accounting-course/60Dpg01.html
Understanding financial statements, Retrieved from: http://www.bizzer.com/images/Financial/
Cash Flow Statements Name Institution Cash Flow Statements Cash flow statements represent financial statements that are a requirement for companies to report in any accounting period. They show how changes in income and balance sheet accounts affect cash and cash equivalents of a firm. It tells the shareholders about cash inflows to the company and how this cash is spent. It reveals a company