Do you think the FASB should continue to require the Statement of Cash Flows or are...

Do you think the FASB should continue to require the Statement of Cash Flows or are the balance sheet and income statement sufficient?

Please answer this discussion question. Write a few paragraphs.

Expert Solution

The FASB requires the cash flow statement to be part of a full set of the financial statement for all businesses. It required cash flow statement to show classify Cash receipts and cash payments in operating, financial and investing activities.

Thus the cash flows statement gives a clear picture of how much cash the company has received and paid during the accounting period. Cash Flow from operations shows how much cash the company is actually generating because of its operations.

Since these are cash items, there is no chance of tempering it however it is possible to inflate the net income of an organization by adjusting the non-cash items.

Also, cash is universally accepted, therefore there is no chance of a difference in value given in statement and the actual value which may occur in case of other tangible and intangible assets.

Hence cash flows statement provides reliable and important information to investors.

Therefore the cash flow statement should continue to be required by the FASB.

ekkarill92 answered 2 hours ago

how do you do statement of cash flows

Some accountants think that the Statement of Cash Flows is the most important financial statement. Do...

Some accountants think that the Statement of Cash Flows is the most important financial statement. Do you agree or disagree with this? Why or why not? Hint - consider a business that is highly cyclical in nature like an ice cream shop!

Do you think that the indirect method of reporting cash flows from operations should be eliminated,...

Do you think that the indirect method of reporting cash flows from operations should be eliminated, allowing only the direct method in the SCFs? Discuss. Textbook: Accounting Theory: Conceptual Issues in a Political and Economic Envirnoment (9th edition) by Wolk, Dodd & Rozycki Textbook: Accounting Theory: Conceptual Issues in a Political and Economic Envirnoment (9th edition) by Wolk, Dodd & Rozycki

Should we continue to measure GDP as we do now? If you don’t think it should...

Should we continue to measure GDP as we do now? If you don’t think it should be changed, explain your reasoning. If you think it should be changed, what changes would you recommend, and why?

Summarize the main requirements of the PPACA. Do you think that the government should require that...

Summarize the main requirements of the PPACA. Do you think that the government should require that every person has health insurance? Explain your answer.

1. Do you think the US should continue to use the first-past-the-post electoral system or should...

1. Do you think the US should continue to use the first-past-the-post electoral system or should we use a different system, such as a rank choice voting system? Explain your answer.

1) What is the purpose of Statement of Cash Flows? 2) Why do we need Statement of Cash Flows?

1) What is the purpose of Statement of Cash Flows? 2) Why do we need Statement of Cash Flows? 3)Statement of Cash Flows tracks net changes in cash flow. Transactions are grouped into 3 categories, Operating, Financing and Investing. Provide one sample transaction for Financial Activity Cash Inflow. (i.e. borrow $5000 from the bank) Provide one sample transaction for Investing Activity Cash Outflow. (i.e. purchase a truck) 4) Companies prefer the Indirect Method for Operating activity. What is the...

Discuss whether you think a government agency or a private body such as the FASB should...

Discuss whether you think a government agency or a private body such as the FASB should set accounting standards.

Why do you add non cash items back to the statement of cash flows and why...

Why do you add non cash items back to the statement of cash flows and why do you add unearned revenue to statement of cash flows ?

The accrual basis of accounting creates the need for a statement of cash flows.’’ Do you...

The accrual basis of accounting creates the need for a statement of cash flows.’’ Do you agree? Please explain your position. Please also discuss cash from operations, investing and financing activities, and the conversion of net income to cash from operations.

Question