The accounts receivable

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The first component in the cash flow statement is cash flow from operating activities or cash from operations CFO which shows the amount of money the company generates from ongoing regular business activities such as producing and selling goods or providing services to customers. This is the first section depicted on a companys cash flow statement. Cash flows from operating activities do not include longterm capital expenditures or investment income and expenses.

The CFO focuses only on the core business and Panama Phone Number is also known as net cash from operating activities Types of cash flows from operating activities Cash flows from operating activities can be shown on the cash flow statement in one of two ways. Indirect method The first option is the indirect method in which the company starts with net income on an accrual accounting basis and works backwards to arrive at a cash basis figure for the period. Under.



Te accrual accounting method revenue is recognized when it is earned not necessarily when cash is received. For example if a customer purchased a product for on credit the sale has been made but cash has not been received. Revenue is still recognized by the company in the month of sale and appears in net income on the income statement. Therefore net income is overstated by this amount in cash. Adding a value of of revenue will appear in.