STATEMENTS OF CASH FLOWS

DEFINITION STATEMENTS OF CASH FLOWS

          Cash flow statement is a financial statement containing information cash inflows and cash flow of a company during a specific period. The presentation of information is classified according to the type of activities that result in cash inflows and the cash out. Corporate activities generally consist of three types, namely, operational activities, investment activities and financial activities.

          Operational activities for a merchandising business consists of buying merchandise, selling the merchandise as well as other activities related to the purchase and sale of goods. For service companies, among other operations are selling a service to its customers. Suppose sells aeronautical services and non aaeronautika. This activity will result in money coming in for revenue and cash flow out to cost. Both revenues and expenses have been reported in the income statement, but the amount of revenue is not necessarily the same as money received because companies generally use the accrual basis for recognizing revenue. So it is with costs, the costs reported income is not necessarily the same as the outflow for the cost.

          Investment activity is an activity to buy or sell an investment return on long-term securities and fixed assets. If the company buys investments / fixed assets will result in an outflow and if you sell an investment / assets will result in a cash inflow to the company.
Financial activities or financing activities some call it, is the activity of attracting money and long-term creditors of the owner as well as refund money to them.

SHAPE / PRESENTATION METHOD STATEMENTS OF CASH FLOWS

          There are two forms of presentation of cash flows, the first and the second direct method indirect method. The difference between the two methods lies in the presentation of cash flows from operating activities. Under the direct method, cash flows from operating activities broken down into cash inflows and cash outflows. Cash flow in and out further detailed in several types of receipts or disbursements. While the indirect method, the cash flow from operational determined by correcting the reported net income in the income statement with a few things such as depreciation expense, an increase of current assets and current liabilities and profit / loss on disposal of investments

READ THE STATEMENT OF CASH FLOWS

          Initially many users of financial statements to devote more attention to the Profit and Loss and Balance Sheet reports. Income statement describing the Company's operating results for a particular period. While the balance of the financial position at a given time.

          Lately realized how to manage the cash that the company also needs to be evaluated by evaluating the cash flow statement.
Before looking at how the company managed its cash, we need to realize that in order to properly read financial statements to understand how the presentation of cash flow information. In the direct method, cash flows from operations are detailed sources and as well as spending cash so it will be easy to understand report appropriately.

          In the indirect method, the cash flow statement of operations begins with net income, and net income is corrected with certain item-item treated differently between the preparation of the income statement (which generate net income) and cash flow statements. In preparing the company's income statement using the accrual basis, so maybe in a given year there are costs that have been treated as an expense (expense), but in that year there is no cash outlay. These are the things that on net income will change to net cashflows from operations. Thus if the cost of amortization and depreciation is added, do not mean that the physical depreciation and amortization will result in a cash flow of it.

          There are several possible cash flow patterns that occur within the company, namely:

          All activities (operational, and financial investasim) generate positive cash flow means cash receipts of each of these activities is greater than the cash outlay. In the first state of all activities generate cash receipts greater than disbursements. Of course in the long run there will be a large cash balance.

          All activities (operational, investment and finance) generate negative cash flow means cash receipts of each of these activities is smaller than spending cash. This is the opposite pattern 1 above, so that in the long term existing cash reserves will be exhausted.

          Operations while the positive and negative financial investment activities. In the third pattern, the company used cash from operations to pay the debt / capital return / pay dividends and to invest. This pattern can be said to be ideal, and many observers say this is the greatest opponents of the state treasury.

          Operations and investment activities positive but negative financial events. While the pattern of investment sales and operational results are used to pay debt capital returns.

          Operations while the negative and positive financial investment activities. This means that companies use most of the investment and withdrawal of loan capital to finance the operations. This activity should not be allowed to drag on.

          Investment activity is negative while the positive financial and operational activities. The company uses cash from operations and borrowings / equity withdrawal to invest.

          Operational activities and financial activities while the negative investment positive. Company's operational activities and investments are partly financed with a loan or withdrawal of capital. Some of the funds are also used for operations. This condition may occur in a growing company.

          Investment activity is positive but negative financial and operational activities. Company may sell investments / fixed assets to meet operational needs and debt repayments / payments to owners.

          In observance of the cash flow pattern over the participant will be able to know the meaning of information on a company's cash flow reported in the statement of cash flows in order to evaluate the cash management of the company.

Accounting for Equity

UNDERSTANDING EQUITY

          Equity is the magnitude of the interests / rights of the owner of the company on company property. If we recall the basic accounting equation, the left side is the right side is a treasure and debt and equity. The left side is a resource controlled by the company, while the right side shows the magnitude of the interests of creditors and the owners of the company property. The magnitude of the interests of the owner of the property called the company's equity.

FORM COMPANY

          There are several companies that form a sole proprietorship, partnership and limited liability companies and co-operatives. Although individual companies are not legally recognized as a separate entity with its owner, but the view of the company's accounting separate from the individual owners. Limited liability company is a legal entity according to the view that humans can perform such activities so that it can be said that PT is an artificial entity (artificial entity). In this module pembahsan emphasized the limited liability company.

CHARACTERISTICS OF THE COMPANY LIMITED

          If viewed from the standpoint of accounting PT is a company whose shares realized by ownership. Stock is a certificate issued by the company. A person or institution who participated submit resources (wealth) will be awarded to the company's stock. They are called shareholders.

TYPES OF STOCK

          Company's common stock issued and sometimes preferred shares. Preferred shares has advantages over the ordinary shares, for example in the distribution of dividends or in the event of liquidation. Dividend is a distribution to shareholders something. Because it has slightly different characteristics, accounting is usually split between shares of common stock with priority / preference.

ISSUANCE OF SHARES

          Because of the process of issuing the shares of stock status can vary as follows:

1. Shares that have been authorized
2. Has been ordered but not yet delivered to buyers
3. Which has sold circulating submitted to the shareholders
4. Bought back and retained by the company
5. Canceled

SALE OF SHARES IN CASH

          If viewed from the set value of a stock, there are three types of shares, namely: (1) shares with a nominal value, the nominal value of going to stocks written. (2) Shares with a value set, in a letter written no par value shares, but the company set its value. (3) Shares of no par value and set value.

1. Shares with a nominal value

          To hem the nominal value or niali specified, the same accounting share capital account will be credited for the face value or the value set. If there is a difference between the set value / nominal with the money earned, the excess is recorded as a discount (if the stock price <par value shares) or premium if otherwise.

2. Shares without par value

          For shares without par value / set, the share capital account will be credited for the money received

 

SALE OF SHARES BY NON-CASH ASSET exchanged

          If the company's shares issued as consideration for the acquisition of non-cash assets such as fixed assets, the exchange will be recorded at the market price of the stock or the market price of the acquired fixed assets which are more reliable

SALE OF SHARES WITH PAYMENT IN STAGES

          If the shares are sold with phased payments or orders, new stock should be submitted after the share price paid by the buyer shares. At the time the company received an order stock, the company will record the share subscription receivable and accounts receivable if received ung credited. Once paid, the stock delivered to the buyer.

THE SHARES OF COMMON STOCK DIVIDENDS Preferred Stock

          If the company has decided to pay dividends and outstanding shares consisting of common stock and preferred stock, the dividend should be allocated to the holders of common stock and preferred stock.
          There are non-cumulative preferred stock. Preferred stock is non-cumulative preferred shares if dividends are not paid for one year, then the amount of the dividend is not payable in subsequent years.

LIMITATION OF RETAINED EARNINGS

          Large retained earnings can be used as a basis for paying dividends. Sometimes for a particular purpose is limited to retained earnings divided ridak in the form of dividends. This restriction is done for several purposes such as protecting creditors if the company buys back shares of the company. Purchase its own shares substantially similar to return the money to the owner. Due to the company's interest in the property is the owner's creditors and, if the company returns the money to the owners, creditors will be threatened its interests. Therefore dividends substantially reversion to the owner needs to be restricted by binding (limiting) retained earnings.

Nonprofit Accounting

            Nonprofit organizations are divided into two major groups, namely government entities and non-profit non-governmental entities. A community is like a car to run well requires four wheels with air pressure balanced. "Wheels that are in the sectors of society that consists of (1) the business sector, (2) the government sector, (3) voluntary sector (volunteer) and non-profit, and (4) the informal sector (households and others).

            Government sector, voluntary, and non-profit sectors closely related to another, as well as the effect on the economy as a commercial organization in general effect on the state budget and taxes in particular, and the effect on people who receive services.

            Nonprofit organization is viewed very differently by commercial organizations by connoisseurs customers, donors and volunteers, government, members and employees of nonprofit organizations. The organization's board selected ideally has a genuine purpose to support the organization, in order to achieve its objectives, although in reality are not always so.

            For stakeholders, accounting and financial reporting duty to hold accountable the board, whatever his inner faith. The professional employees of nonprofit organizations are assumed to be treated equivalent to professional employees of commercial organizations in terms of remuneration, career, job, and future. For them, the accounting organization in charge of informing the sustainability of life as a career.

            The members are assumed to seriously participate in a non-profit organization to achieve a certain ideal organization concerned is in line with its aspirations, then the financial statements are expected to provide information periodically, in order to give you an idea, whether it is a dream realized by winning the non-profit organization.

            The customer or the parties that were targeted to be benefited and hoped to obtain the promised benefits infermasi organizations need to get on target achieved by the organization. The financial statements should show the benefits or results that may be achieved is if the amount denominated in money.

            For the government, non-governmental non-profit organizations must comply with the provisions of law, and is expected to contribute positively to the social life, politik.ekonomi, and national culture as well as giving a good image is good for the nation. Here, the financial statements serve as bait baIik to the government. If there is a clash dankepentingan expectations, the financial statements are balanced to give information for the various interested parties.

            Target non-profit organization, its members hope, and the desire of the government and the public performance will not always be denominated in units of currency, so that achievement, contribution or benefit an organization is not always accommodated by the financial statements.

In conclusion, the main target is the nonprofit entity's financial statements present information to the resource provider, which is on March briskly past.        And at the moment will come, and other parties concerned to picked up her rational decisions in the allocation of resources to non-profit entities. In addition to government and commercial entities, the future of the nation and the people directly affected by the civil society (civil society), including non governmentorganization (NGO), non-governmental organizations (NGOs), religious and social organizations.

Cash and Cash Equivalents

Cash is a payment tool and includes part of the liquid assets, which can be used immediately to meet financial obligations of the company. Cash can be in cash or in bank deposits that can be used and accepted as means of payment at nominal value, such as paper and metal money, check and bank draft, bank deposits in current accounts and others.

Cash includes cash and bank and savings directly in banks can be cashed at any time without reducing the value of the deposits. Cash may consist of petty cash or other cash funds as cash receipts and checks (which is not backwards) to paid to the bank.

Equivalents are investments that are highly liquid, short-term and quickly made ​​a certain amount of cash without facing the risk of changes in value significantly.

Small cash payments provided for purposes of the small numbers and are not practical when done by check. All petty cash expenses recorded in the petty cash book and posted to the general ledger only once when the petty cash replenishment. Funds specified in the petty cash should be set melelui management decisions and must not exceed these specifications. Petty cash expenditures can only be made after the order has been signed by the cash disbursements authorized officer.

Treasury functions in a company is very important, because almost every activity undertaken by the company are always associated with kas. Without cash will not run smoothly. Good corporate cash needed to finance day-to-day enterprise or for the purchase of fixed assets, properties continue or not continue. Continue nature, for the purchase of raw materials, payment of salaries and wages, purchasing consumable office suplies etc.. While the nature Not Continue, for payment of taxes, dividends, installment, loans etc..

Noun Clauses

Definition :

            A noun clause is an entire clause which takes the place of a noun in another clause or phrase. Like a noun, a noun clause acts as the subject or object of a verb or the object of a preposition, answering the questions "who(m)?" or "what?".

Examples:

o   Noun : “ I know Latin “.

o   Noun Clause : “ I know that Latin is no longer spoken as a native language “.

In the first example, the noun "Latin" acts as the direct object of the verb "know." In the second example, the entire clause "that Latin ..." is the direct object.

            In fact, many noun clauses are indirect questions:

o   Noun : “ Their destination is unknown “.

o   Noun clause :  “ Where they are going is unknown “.

The question "Where are they going?," with a slight change in word order, becomes a noun clause when used as part of a larger unit -- like the noun "destination," the clause is the subject of the verb "is."

Here are some more examples of noun clauses:

o   About what you bought at the mall

This noun clause is the object of the preposition "about," and answers the question "about what?"

o   Whoever broke the vase will have to pay for it

This noun clause is the subject of the verb "will have to pay," and answers the question "who will have to pay?"

o   The Toronto fans hope that the Blue Jays will win again.

This noun clause is the object of the verb "hope," and answers the question "what do the fans hope?".

Noun-Clause Starters

"We use various words to start noun clauses. . . .

"These words include the word that, which in its role as a noun clause starter is not a relative pronoun, for it serves no grammatical role in the clause; it just starts the clause.

For example:

o   The committee stated that it would follow the agent's policy. Here the noun clause serves the noun role of direct object of the transitive verb stated. But a careful look at the clause reveals that the word that does not serve any role within the clause, other than simply to get it going.

"Other noun clause starters do serve grammatical roles within the clause.

For example:

o   We know who caused all the trouble. Here the noun clause starter is the relative pronoun who. Notice that inside the noun clause who serves as the grammatical subject of the verb caused.

"Additional words serve as noun clause starters. A relative adverb can get one going: How he won the election mystified the pundits. So can a relative pronoun acting as an adjective: We know which career she will pursue. In these two sentences, how is an adverb modifying the verb won, and which is a relative-pronoun-adjective modifying the noun career." (C. Edward Good, A Grammar Book for You and I--Oops, Me!. Capital Books, 2002)

The meaning of a Noun Clause :

A noun clause does the work of a noun in a sentence or phrase. It is a group of words containing a subject and a finite verb of its own.

Some Rules: noun clauses usually begin with words like how, why, what, where, when, who, that, which, whose, whether, etc. Also words like whoever, whenever, whatever and wherever

There are therefore just three basic types of noun clauses:

·         those that start with a question word such as where, how, who, when and why

·         those that start with whether, whatever etc or if

·         those that start with that.

Examples of the noun clause:

·         Where does John live?

·         If John buys a Ferrari

·         That Mr. Smith is a good teacher

·         You really do not want to know what Mrs. Smith gives her husband for dinner
(what "Mrs. Smith gives her husband for dinner" is the noun clause)