Statement of Cash Flows (PAS 7)

This flashcard set covers the key concepts and definitions related to the statement of cash flows as outlined in PAS 7.

Statement of Cash Flows

A financial statement that presents the sources and utilization of cash and cash equivalents during a period.

Operating Activities

Cash flows from the principal revenue-producing activities of the entity, including inflows from selling goods and services.

Investing Activities

Cash flows associated with the acquisition and disposal of noncurrent assets and other investments.

Financing Activities

Cash flows that affect the entity's borrowings and contributed equity, including issuing or redeeming shares.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Direct Method

A method of presenting cash flows from operating activities that shows each major class of gross cash receipts and payments.

Indirect Method

A method of presenting cash flows from operating activities that adjusts profit or loss for the effects of non-cash transactions.

Cash Basis

An accounting method where income is recognized only when received and expenses are recognized only when paid.

Non-Cash Transactions

Transactions that do not affect cash and cash equivalents, which are excluded from the statement of cash flows.

Interest Income

Income from investing activities, classified under investing activities if the entity does not have a specified main business activity.