Page 257 - F3 -FA Integrated Workbook STUDENT 2018-19

Statement of cash flows

2.2 Definitions

Cash: cash on hand and at bank plus on-demand deposits and after
deduction of overdrafts.

Cash equivalents: short-term highly liquid investments, subject to
insignificant risk of changes in value.

There are two methods of reconciling cash from operating activities, the direct
method and the indirect method.

You need to be aware of both methods of classifying cash flows from operating
activities.

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