What are the differences between cash flows from operating activities and the elements of an income...
What are the differences between cash flows from operating activities and the elements of an income statement?
Homework Answers
Answer
--Points of difference summarised below:
| Cash Flows from Operating Activities | Elements of an Income Statement | |
| 1 | This is based on CASH BASIS | These are based and recorded on ACCRUAL BASIS. |
| 2 | Non Cash items like Depreciation and amortisation are not shown. | Non Cash item like depreciation and amortisation forms part of Income Statement. |
| 3 | Methods used include Direct Method and Indirect Method | Methods used to show element include Single step and Multi Step |
| 4 | Positive result = Net Cash Inflow | Positive result = Net Income |
| 5 | Negative result = Net Cash outflow | Negative results = Net Loss |
| 6 | Elements not included: | Elements included in Income Statement: |
| Loss/Gain from sale of Assets | Loss/Gain from sale of Assets | |
| Loss/Gain from sale of Investment | Loss/Gain from sale of Investment | |
| Depreciation, Amortisation, written off expenses | Depreciation, Amortisation, written off expenses |
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