Statement of Cash Flows – Tools Needed For Completion

Statement of cash flows – Tools needed for completion will talk about the tools we will need to complete a statement of cash flows. The statement of cash flows will generally be the last financial statement we will prepare. In other words, we will prepare the balance sheet, income statement, and statement of equity before the statement of cash flows. The primary tool financial statement we will use will be the balance sheet. We will need a comparative balance sheet or a balance sheet showing the current period and the prior period. From this balance comparative balance sheet will generally create a worksheet showing us the changes from year to year. We will also need the income statement. When using the indirect method the income statement will be necessary to verify some balances. We will also need additional information which is often given in a book problem. In practice we would need the general ledger for some accounts and access to supporting documents for some transactions.
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