Cash flow statement help.

IpreDictDeatH

I have two questions regarding cash flow statements that i hope somebody can help me with. I am trying to put a basic one together and i just want to make sure i am doing it correctly.

1. If it is a new business and the statement is for year one, do i put in the cash investment that was used to start the business as the cash/bank position for the first month or do i start from a zero number?

2. How do i deal with 30 day payment terms on merchandise purchased? Do i record the payment when it actually happened or when invoice was issued.

Any help would be greatly appreciated.

dyanne

Hope I can help

1) Cashflow statements record the movement of all cash in and out, therefore if there was a cash inflow in month one, that is recorded in month one (the opening cash/bank balance should correspond exactly to the actual balance at the beginning of month one also)

2) Creditor payments should be recorded as and when the cash actually left the business, regardless of when orders were placed or invoices were issued.

IpreDictDeatH

Sweet,

The secrets in the name i suppose, CASH FLOW statement.

Thanks for clearing that up. I now know what i'll be doing this evening