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Edit PDF files for free with our online PDF editor ! You can add text , images, and signatures, white-out and highlight content, and more. Information about cash receipts and disbursements presented in a statement of cash flows is designed to help the reader of the financial statements assess (1) an entity s ability to generate future net cash flows, (2) its ability to meet its obligations as they come due, (3) its needs for external financing, (4) the reasons for differences between operating income or net income, if operating income is not separately identified on the operating statement, and (5) the effects of the entity s financial position on both its cash and its noncash investing, capital, and financing transactions during the period. While a statement of cash flows refers to and focuses on cash, included in the definition of the term cash for purposes of preparing the statement are cash equivalents. Cash equivalents are short-term, liquid investments that are so close to cash in characteristics that for purposes of preparing the statement of cash flows, they should be treated as if they were cash. Cash equivalents are defined as short-term, highly liquid investments that are Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates In general, only those investments with original maturities of three months or less are considered to meet this definition. Common examples of cash equivalents are Treasury bills, commercial paper, certificates of deposit, money-market funds, and cash management pools. A statement of cash flows classifies cash receipts and disbursements into the following categories: free online pdf editor software full version: Icecream PDF Editor: Free PDF Editor for Windows 10 pdf editor mac free online PDFescape - Free PDF Editor & Free PDF Form Filler
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