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EBFinancials
January 11, 2019

Statement of Cash Flows - Operating activities part

  • January 11, 2019
  • 1 reply
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Re: preparing the State of Cash Flows in the indirect method
Section of Accounts payable - What if the company pays off completely all its bills every month which end up with no bills due at the end of the month. In this case what should be input in this section of the statement. In my company case, it is, though, possible that at the point of preparing the statement, the there will be few bills due, however, they will be all fully paid within 2-3 weeks from that point of time (date)

    1 reply

    john-pero
    john-pero
    January 11, 2019

    Statement of cash flows is time period sensitive. For the included dates if there are entered, unpaid bills they MUST be included in the A/P adjustment to adjust net cash provided by operations downward. If you do not want A/P in the report then :

    1. DO not enter any vendor bills but instead wait and just enter checks - then the numbers will appear in top line of Net Income.

    2. Wait to run report AFTER bills are paid

     

    Do not consider making your own adjustment to the numbers. An unpaid bill is an unpaid bill. Period.

    E
    EBFinancialsAuthor
    January 11, 2019

    @john-pero

    1. When you say downward, do you mean down in the statement in the section of the Cash flows from operating activities, I mean, do you mean position-wise?
    2. If I take the route of entering those vendor bills as checks - Does it mean they go into the expenses portion of the Net income (loss)?
    3. At the point of time of the Statement of cash Flows there is a vendor bill that is unpaid and on hold due to legal dispute that is underway but still not resolved - How do I account for it in the Statement of cash Flows

     

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