Get Out Of The Wrong Preparation Of Cash Flow Statement

In recent years, such as annual inspection of enterprises and loans to financial institutions, the cash flow statement has become one of the indispensable statements, and its application is more and more extensive.

This article introduces two unwritten simple methods based on the author's experience in compiling the report forms.

The cash flow statement is a statement of changes in financial position based on cash, reflecting the amount of cash inflow and outflow within a certain period of time.

It shows the ability of enterprises to obtain cash and cash equivalents.

Since 1998, China's Ministry of finance has asked enterprises to replace the statement of changes in financial position with cash flow statements, reflecting the financial position, operating results and cash flows of enterprises from different angles together with the balance sheet and profit statement.

Due to the fact that the cash flow statement has not been formally compiled in China for a long time, it is still unfamiliar to most accountants. Because no special professors have been taught, beginners are often confused by many of the rules and regulations, the cumbersome adjustment entries in the working papers preparation methods, or although they have mastered all kinds of regulations, they often fail to understand the true meaning of the flow table and cause the theory and practice to not be well integrated.

The statement of cash flow is more complicated than the two statements of balance sheet and profit statement. It is mainly manifested in the following aspects: first, the data source of the cash flow statement has no direct basis, and we need to analyze, calculate and summarize it according to the amount of each accounting item in the reporting period.

The balance sheet and profit statement can be directly filled out according to the final balance or accumulated amount of accounting items at the end of the reporting period, such as assets, liabilities, owners' equity, income and expenses.

The two is that the cash flow statement needs to collect more columns and fill in many regulations.

Which economic activities can be reflected in this column, which can not be reflected, and which economic business that can not be reflected must be filled in other columns.

Three, the compilation method of cash flow statement is difficult for beginners.

At present, the working papers are widely used. This method is more rigorous and easy to check, but cumbersome. The redundant adjustment entries make it difficult for many accountants to understand in a short period of time.

The compilation of the statement of cash flow is not very complicated. As long as we grasp and understand the real meaning of the word "cash", we must firmly grasp it.

The cash flow statement is compiled on the basis of "cash", which refers to generalized cash, including cash on hand, bank deposits, other monetary funds and cash equivalents, which can be used for payment at any time.

The so-called "cash" basis can be intuitively understood as the amount of economic pactions involved in cash flow and outflow in the reporting period, that is, the amount of cash flow statement that needs to be analyzed, summarized and filled in the table.

For the specific provisions of each column in the table, there will be no more details here. There are detailed and specific statements in the CPA Examination "accounting" or the "cash flow statement" section of the intermediate accounting practice.

In this way, tabulating people basically need to complete the preparation of reports through three interrelated steps.

First of all, according to the enterprise's cash journal during the reporting period, including cash inventory, bank deposit journal, other monetary fund subsidiary ledger, short term investment ledger (mainly in the 3 month or less time, which is registered or purchased within a short period of time or converted to cash in the short term investment ledger, excluding stock investment), the economic matters recorded in the same below, in accordance with the order of business, sequentially analyze and determine each type of economic business.

This work can be done in cash journal.

The record of the other subjects to determine, the record is not clear, can be viewed by looking at the original evidence of the business to determine.

To determine whether a cash inflow is the cash received from the sale of goods to provide services, or to recover the cash received from the investment; whether a cash outlay is the cash to pay for the goods purchased, or the cash paid to the staff and workers, and so on.

The second is to register a pen in the corresponding column of the cash flow statement after confirmation.

Finally, all the economic items recorded in the cash journal are analyzed and analyzed. After the registration is completed, the total number of registered data in the same column can be compiled into the positive statement of the cash flow statement.

There is no need to consider the economic operations that cash converts between the four forms, such as cash withdrawals and cash deposits into banks.

This method is suitable for small businesses with limited cash volume, easy to understand, easy to operate and high accuracy, but it is not suitable for enterprises with large cash volume.

The so-called "family division" is to divide all the subjects into two parts: the amount of cash and the amount of non cash, which is the key to the division of family law.

In this way, we should start with the main business income of the profit table, and divide the profit table and the current account amount in the balance sheet into two parts: the cash occurrence amount and the non cash occurrence amount according to the order of profit table and balance sheet.

Then the cash amount is added to the corresponding column of the cash flow statement according to the nature of economic business, and the cash flow statement can be compiled.

Similarly, the amount of non cash pactions does not need to be considered.

The author gives two examples of "main business income" and "main business cost" as follows.

In 2005, the annual cumulative amount of the "main business income" subject in an enterprise profit statement was 1 million yuan. Through checking the "main business income", "detailed account" and checking with the bank deposit journal, it was found that the bank deposit was 800 thousand yuan and the accounts receivable was 200 thousand Yuan: "other business income", the annual cumulative amount of subjects was 100 thousand yuan, all of which were cash income from the provision of labor services (assuming the tax was not counted).

When preparing the cash flow statement of the enterprise, we can directly fill in the cash column of "selling goods and providing services" by 900 thousand yuan without considering the accounts receivable part of 200 thousand yuan.

In addition, the cash inflow due to accounts receivable, receivables, accounts receivable and other receipts in the balance sheet due to current accounts receivable, receivables or additional accounts receivable should also be incorporated into this column.

That is, cash received from selling goods and providing services = main business income, cash receipts in other business receipts + tax payable shall be paid in cash tax on value-added tax (output tax) + receivables, receivables, cash receipts and cash receipts from advance accounts receivable.

The main business cost mainly accounts for the carry over cost of the products sold in the reporting period, and generally does not involve cash.

Cash disbursements are reflected in the original subject of "stock", so the cash paid for the purchase of goods and services is the cash paid for the purchase of stock (raw materials) (excluding part of the project preparation) + the tax payable - the cash payable in the value added tax (input tax) + the decrease in accounts payable, notes payable and cash payments in advance.

For the direct labor cost of cash in the inventory cost, we should separately divide it into the "payment to employees and cash payments for workers" according to the regulations.

In the process of analyzing the fill in flow meter, we can not calculate according to the formula, but analyze it according to the sequence of one subject and one subject. The amount of cash in the subject is counted in the corresponding column of the cash flow statement. There is no cash turnover in the subject, such as "main business cost", so we do not need to consider. After all subjects are analyzed, the data in the same column of the cash flow table can be added.

This will not repeat the same project, nor will it leak out. It can improve the accuracy of flow meters orderly.

This method is actually a simplification of the "working paper method", which is the same as that of the working paper method. However, the working paper method is to show all our analysis process in the form of accounting entry. The rule of family separation has omitted the process, more intuitive, and more in line with the essential definition of the cash flow scale, which is easy to understand subjectively and is convenient for practical operation.