8 Statement of Cash Flow

You already know a lot about cash. You know how to journalize cash transactions and how to reconcile the cash account. And you know the importance of cash management to a company’s business model. In fact, cash is so important that it gets its own statement: the Statement of Cash FlowStatement of Cash Flows:
One of the four financial statements prepared by companies in their reporting cycle. This statement tells financial statement users about the sources and uses of cash. It is a reconciliation of cash and cash equivalents from the beginning to ending balance where changes in cash and cash equivalents are grouped by activity: operating, investing, and financing.. This statement tells readers how the company gets its cash and how it spends cash. Because you know a bit about cash transactions, let’s spend some time on categorizing these transactions.