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Posted by ~^ beancounter ~^ on May 23, 2008, 10:29 am
Please log in for more thread options Yep...No one gets out of here alive... =8B(=95=BF=95)=9B
" Don't worry about life; you're not going to survive it anyway "
> On Wed, 14 May 2008 20:52:31 -0700 (PDT), Girish wrote:
> > wrote:
>
> >>> In the cash flow statement of a company, I am seeing depreciation
> >>> being ADDED and clubbed with the sources of funds(net income, debt
> >>> incurred etc). Is this correct? Why?
>
> >> Depreciation is an expense deducted from net income, but it isn't a cas=
h
> >> outlay.
>
> >> The cash flow statement tries to reconcile net income to the change in =
cash.
> >> So you add back expenses where cash isn't going out the door - deprecia=
tion,
> >> increases in payables, etc.
>
> >> --
> >> Paul A. Thomas, CPA
> >> Athens, Georgia
>
> > Ohkay! Got it. Glad I asked though. So just as you are adding back
> > account payables, you must also subtract account recievables in the
> > cash flow statement. Right.
>
> Yup, paper debits and credits must be eliminated until you are left with
> actual cash flow.
>
> --
> Don't worry about life; you're not going to survive it anyway.
>
> RocinanteREMOVET...@gmail.com
> 5/20/2008 10:41:36 PM- Hide quoted text -
>
> - Show quoted text -
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