1. avatar says

    Sir, thank you for the lecture!

    I have one question. In the balance sheet, there is a current liability to bank. I wonder how current liability to bank affects statement of cash flows.


    • Profile photo of MikeLittle says


      This would be better posted on the “ask the tutor” forum – it’s just fortunate that I happened to see it this time!

      The whole aspect of bank overdrafts is dealt with within the video lectures. Have you watched them? If not, please do so. If you have watched the videos, please let me ask you to watch again but this time pay attention!


      If you’re still stuck, post again but, next time, post on “Ask the tutor” forum

  2. Profile photo of zee says

    Just started studying this lesson for F7 december exams! But I have done basic and comprehensive questions on cash flows for O/L, A/L & AAT exams… But never got a clear lecture like this! I have no words….. thanks alot Sir! May God bless you in many ways!

  3. avatar says

    Dear Mike,
    under the CL, we have an overdraft balance of $60, so when we will calculate the cash and cash equivalent C/F for end of the year, then will we not take into consideration? if then, this extend C/F balance coming $(11). Even on the notes it shows like that as well.
    copied from notes
    Net cash flow from financing activities 360
    Net decrease in cash and cash equivalents (92)
    Cash and cash equivalents at start of the year 81
    Cash and cash equivalents at end of the year (17 + 32 – 60) (11)

  4. avatar says

    Sir you said that when we start a statement of cash flow the 4th figure to write down is ‘net cash flow for the year” I would like know how u got net cash flow for year (32) in example 6 please?

    • Profile photo of MikeLittle says

      By putting in the “Cash and equivalents carried forward”, then the “Cash and equivalents brought forward” that then means that you can arrive at “Net cash flow for the year”

      Can you agree “Cash and equivalents brought forward” as $81?

      Can you see the cash balance at the end of the year is $17 (in the current assets)?

      And you can see the overdraft amount of $60 carried forward (in the current liabilities)?

      And you’ve read note 3 on page 112?

      Then ……

  5. avatar says

    Hello Sir,

    The increase in receivables should be 92 according to the notes and not 32.
    The original figures are:
    2008 – 492
    2009 – 584
    There fore the net cash flow should be 11 negative according to notes answers.


  6. Profile photo of Accountmanaic says

    Sir, i understand how you arrived at all the figure except for the increase in receivable which i was thinking should be (584-492) 92…. i cant figure out how you got the 32…. i know i missing something in there. do help me please.

      • avatar says

        Same here – I think the notes have been updated since the lecture – check the answers; it’s 92 there (although you then end up with a cash c/fwd of -11. This is also in the answer and you have to adjust for the overdraft (60) from the bank which was not in the original lecture.

        All good!

        Fabulous lecture Mike. Thank you!

      • avatar says


        I have a comment on the notes answers as the 60 at the bank at the end of year 2009 isn’t an overdraft and should add up to the 32 and 17 giving a total of 109 !
        we deduct that from the 81 opening balance to arrive at a positive net cash flow of 28 (if receivables figure in the cash flow statement is 92 negative)

        Right Mike?


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