Back To Basics: Teaching The Statement Of Cash Flows

Abstract

A conceptual foundation for the Statement of Cash Flows based on the ten elements of financial statements provides students with a deep understanding of core accounting concepts. Traditional methods of teaching the statement of cash flows tend to focus on statement preparation rules, masking the effect of business events on the change in cash. Accounting majors and non-majors alike both benefit from a clear understanding of the direct relationship between economic events and financial statement elements. This teaching note provides a conceptual illustration of the Statement of Cash Flows based on the ten elements of financial statements. The teaching method used is based on the belief that keeping it simple results in deeper understanding. This paper develops an equation for the Statement of Cash Flows directly from the Balance Sheet focusing on ten elements of financial statements. The equation analysis is followed by a flowchart illustrating the process and a simple numeric example.

Negligent retention of counterproductive employees

“…In addition to the human resource implications of counterproductive-employee behavior and negligent retention, management should be aware of the actual costs associated with the impact that retaining counterproductive employees has on overall organizational performance (Axelrod et al, 2002;Mount et al, 2006). In most organizations, processes are in place to calculate the traditional costs of doing business, such as the cost of producing a product, the cost of scrap, the cost of maintaining work facilities and equipment, the cost of the various elements of the total compensation package, and other miscellaneous costs (Cecil and King, 2011;Coles et al, 2007;Drysdale et al, 2010;Liberopoulos et al, 2007;Keles et al, 2011;Margret, 2002;Ohlson, 2006;Patterson, 2008;Phusavat et al, 2009;Ramírez and Nembhard, 2004;Thilmany, 2008;Williamson, 1981). Furthermore, most organizations are probably capable of determining the approximate cost of sabotaged equipment and employee theft (Mount et al, 2006).…”

Back To Basics: Algebraic Foundations Of The Statement Of Cash Flows

“…The detailed nature of the algebraic relations and their role in the preparation of the SCF are described in Rai (2003) and Chen et al (2009). Pedagogical approaches aimed at helping the students improve their understanding of the different steps involved in the preparation of the SCF are discussed in O'Bryan et al (2000), Laux (2009), Wang (2010), and Cecil et al (2011). In this paper, the goal is to supplement the recent pedagogical approaches to the preparation of the SCF.…”