The cash flows are classified as follows:
operating cash flows: include the cash effects of transactions that involve the normal business of the firm.
investing cash flows: are those resulting from the acquisition or sale of property, plant and equipment; of a subsidiary or segments; and of investments of other firms
financial cashing flows: are those resulting from issuance or retirement of the firm's debt and equity securities and include dividends paid to stockholders
Proxy statements are issued to shareholders when there are matters that require a shareholder vote.
retained earnings: Cumulative net income that has not been distributed as dividends.
The principle of accrual accounting requires that revenue is recorded when the firm earns it and expenses are recorded as the firm incurs them, regardless of whether cash has actually paid.
Accrued revenue: The firm provides goods or services before it receives cash payment.
Accumulated depreciation is contra asset account that typically offsets the historical cost of property, plant and equipment.
The general journal lists all of the company's transaction by date. The general ledger lists them by account.
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