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ACCA F3 Statement of Cash Flows – Introduction
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Hi sir, i have issue solving cashflow long question, i even can’t post it here so how would i get help ?
Thanks !
You ask in the Ask the Tutor Forum – not as a comment on a lecture 馃檪
Very well explained, Thanks Mr John Moffat 馃檪
Thank you 馃檪
Dear sir
could you plz explain me why interest paid/received is deducted from profit after tax in Cash flow from operating activities
thanks
Interest received is not deducted!
Interest paid is deducted from the profit after tax because it is a cash payment, and the statement is showing cash receipts and payments.
Mr Moffat, could you please go through Retained Earnings in 2 3 words. I want to know ur explanation.
Cheers, sir.
I am not sure what you are wanting! 23 words about what?
The retained earnings increase each year because of the profits that have not been paid out as dividends.
So the increase in the retained earnings will be the profit for the year less whatever dividend has been paid.
So any decreases in profit lead to decreases in REtained earnings and vice versa, right?
E.g 1)depreciation policy changed from 10 % to 20 %.
What’s the effect? Retained earning should decrease ain’t it?
And 2) do losses in inventory have any effect on sales? Because I have read that ” no ” and didn’t understand why:) thank you.
Any profit increases retained earnings!
But if we reduce the profit then we reduce the retained earnings.
Why should losing inventory affect how much you sell? What you sell depends on what people want to buy!
Could you please, explain the difference b/w operating activities and investment activities!? Thanks in advance!
But I do explain both in this and the following lectures!
Operating activities are the revenue and expenses that appear in the Statement of profit or loss.
Investing activities are the purchase and sale of non-current assets.
I have a few questions:
1) What if there is a decrease in share capital & share premium? How do you treat this?
2) Say Yr1 there was no Loan but Yr2 there is loan of say 100,000. If you calculate loan repaid then its will be (0-100 = -100) Is this shown as a cash inflow or simply its left out?
Thanks in advance looking forward for a response as soon as possible.
Video helps a lot *thumps up*
In future, please ask this sort of question in the Ask the Tutor Forum rather than as a comment on a lecture.
1. Share premium can only decrease if there has been a bonus issue of shares. In that case there is no cash flow (share premium down, share capital up).
Share capital will not decrease – not in Paper F3.
2. In this case it means they have taken a loan (borrowed money) and therefore there is a cash receipt which will appear under the heading of financing activities.
Hello.
Just wondering whether theirs a possibility of getting a question related to cash flow for one of the 15 mark questions. If so will it be in the Indirect method.
Yes – it is possible. (Try our mock exam!)
It ask about either method, but any numbers will probably be the indirect method.
Will we be asked to prepare a full cash flow statement at the exam. Or is it more fill in the blanks
Assuming you are taking the computer based exam, it will be fill in the blanks.
However you need to know the layout because you can be asked in the multiple choice section which heading certain items appear under.
Great Video. Clearly explained. Now onto the example…!
Yes – the cash balance also includes short-term investments.
Proceeds of sale of non-current assets is shown under ‘cash flows from investing activities’.
(Have you watched the lecture, because all these questions are actually answered in the lecture 馃檪 )
sorry sir, actually i hv watch already , but my english is poor, cannot fully understand.
thank you your explain now already understand and find out the answer. Thank so much.
if question have cash in hand and bank overdraft how to do this?cash balance b/d and c/d is cash in hand or bank overdraft?
The cash balance is the net of all cash balances (i.e. cash at bank plus cash in hand minus bank overdraft)
short-term investments want to plus?
proceeds of sale non-current asset investments it want to record in ?