Paper Topic:

Accounting

The statement of cash flows shows the cash receipts and disbursements for the entire period accordingly classified as belonging to operating investing or financing activities (White , Sondhi Fried , 1996 ,

. 19 In one glance , one can see the overview of the company 's activities for each year . The statement of cash flows easily directs the users of financial statements to the material transactions of the year , both cash and non-cash transactions

The statement of cash flows also names the activities affecting the income and capital accounts of the company without necessarily involving

br the use of cash (White , Sondhi Fried , 1996 ,

. 19 . In the case of Candela Corporation and Subsidiaries , its consolidated statements of cash flows for its fiscal years ended June /July 2002 to 2004 clearly cites the net loss figure for 2002 and the net income figures for 2003 and 2004 . The provision for the disposal of discontinued operations , at over 2 million , is accordingly emphasized by being added back to the generated net income

The same is true with other non-cash expenses such as depreciation expense and bad debts expense . These items are treated in the same way as the expenses requiring the use of cash when one looks at the company 's income statements . One can easily be misled into believing that the company 's decreased net income would also mean that the company lost so much cash . The statement of cash flow , then , provides the needed proof or explanation that some material expenses incurred during...

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