Hi!
I'd like to know why my general journal entry transaction below involving retained earnings and capital account are showing up on the statement of cash flows when these don't involve cash?
Retained Earnings---- XXX
Owner's Capital----------XXX
Does it assume corresponding cash flow for every entry?
Hope to get some relevant explanation. Thank you!
Look no further, I’ve got the information you need about why non-cash related general journal entry transactions involving retained earnings and capital accounts are showing up on Statement of Cash Flows, @Ruth36.
Retained earnings are the cumulative net earnings or profits of a company after accounting for dividend payments which are part of financing activities. Thus, it reflects in your Cash Flow statement. While Owner’s capital is a contribution to a business that represents an investment for an individual and also part of the financing, so it’ll appear on the Cash flow report.
I have here an article that contains details about cash flow statements and how it’s connected to other financial reports in QuickBooks: Statement of cash flows.
You can always reach back out if you need more help or assistance with your cash flow statements. I’ll be here anytime to ensure all are covered. Take care and have a good day!
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