Topic The Statement of Cash Flows (SCA Chapter Sixteen Financial Statement Review - Up to this pain in your accounting careet, you have learned how to prepare the foBowing the financial statemci Order Financial Statements Period or Date (1) (2) You will not be surprised to find out that most corporations are also required to prepare a fourth statement known as the (4) Before we learn about the Statement of Cash Flows (SCF) let's refresh our memory of the fine three statements . Income Statement: Net Income minus . Revenues of the period are period to determine the result of operations ist expenses of the . Revenue and Expenses are recorded under the basis of accounting . The accrual basis means Revenue is recorded when it is Expenses are recorded when (when you owe it whether or not has been received or paid out. Thus, the amount of reported does NOT mean the same amount of has been received The starting number on the Statement of Cash Flows (SCE method) the for the year . But remember, accrual batis Net Income does NOT equal cash - therefore the Net Income number must be adjusted on the SCE What are two generally accepted accounting principles that the Income Statement is based upont . . What principle is the statement of cash flows based upon? 121