大学会计英语课件陈庆柏 主编978 7 81134 917 7unit 6.pptVIP

6.2 Major Types of Financial Statements 6.2.3 A Statement of Cash Flows Preparation of a Statement of Cash Flows The Direct Method This method is preferred or rather favored by the US Financial Accounting Standards Board (FASB) — the primary regulatory body over accounting principles and practices in the US. The Indirect Method Instead of using the direct method of preparing statements of cash flows, accountants often find it convenient to compute cash flows from operating activities by the indirect method. 6.2 Major Types of Financial Statements 6.2.4 Statement of Retained Income Definition In the US it is also called statement of retained earnigs, which, as one kind of financial statements, analyzes changes in the retained earnings or retained income account for a given period. 6.2 Major Types of Financial Statements 6.2.4 Statement of Retained Income Function Such statement demonstrates the major reasons for changes in retained earnings. It also tells you that net income increases retained earnings, and losses and dividends reduce retained earnings. Note especially dividends are not expenses; they are not deductions in computing net income. Sample or Specimen (P48) Can you tell the major types of financial statements and their functions? What are the purposes of cash-flow statement? What are the two methods of preparing a statement of cash flows? Which one is better? How is income statement called in the UK? Questions for Unit 6 Define the following terms a statement of profit and loss proprietor accounts receivable fixed assets Questions for Unit 6 Paraphrase the following esp. the underlined parts Revenues are increases in ownership claims arising from the delivery of goods or rendering of services. Expenses are decreases in ownership claims arising from delivering goods or services or using up assets. Liabilities are an organization’s or a firm’s economic obligations to nonowners. Stock- holders’ equity or owner’s equity is the excess of assets o