What does statement of cash flows mean on the CPA exam?
Statement of cash flows. The statement that explains the change in cash by sorting it into operating, investing and financing activity. It reconciles accrual earnings to cash actually moved.
Defined against ASC 230-10-45-1.
Which CPA exam sections use statement of cash flows?
Statement of cash flows appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Other terms defined against ASC 230-10
- cash equivalents: Short-term, highly liquid investments readily convertible to known amounts of cash and so near maturity that interest rate changes pose insignificant risk.
Related terms
- financial statements: The formal set an entity publishes: balance sheet, income statement, statement of cash flows, statement of changes in equity, and the notes.
- income statement: The statement of what was earned and spent over a period, ending in net income.
- capital structure: The mix of debt and equity funding the entity uses.
- at-risk amount: How much a taxpayer could actually lose in an activity: cash and property contributed, plus debt they are personally liable for.
- effective portion: The part of a cash flow hedge's gain or loss that actually offsets the hedged risk.
- perfection: The step that makes a security interest good against other creditors, usually by filing a financing statement.