The logic behind prepayment and accruals in Cash Flows

This topic has 1 reply, 2 voices, and was last updated 11 years ago by MikeLittle.

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March 17, 2015 at 12:24 pm #232768
Anonymous
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Hi Mister,

May I please ask the deduction/add back logic for prepayments/accruals with regard to cash flow reconciliation in terms of increase/decrease?
Thank you.
March 18, 2015 at 12:17 pm #233135
MikeLittle
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Where we have a prepayment or an accrual, that’s telling us that the income or expense is not yet received / paid and, as such, needs to be adjusted in a statement that tries to show the flow of CASH

Does that explain it for you?
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