Week 6 Assessment

1.I found the cash flow statement interesting, I hope can remember it all in the test! In class I found it relatively easy but when trying it in the assessment it was harder than I thought to get the reconciliation and the statement to balance. I do think that the practical activities with the e-reflections are a good way to try what we have learnt although I would like more feedback from Nadesa on how I have done and where I maybe going wrong. I do appreciate that this may be difficult given the numbers of students he must be teaching.

2.The difference between cash based accounting and accrual based accounting as example with a sale is that cash based will only recognise the transaction in the period the payment has been earned and received. Accrual based will recognise the transaction in the period earned but before payment has been received and will also take into account money paid in advance of services or goods.

3.The cash flow statement contains information vital to the Management, owners, suppliers and potential investors as it gives an accurate picture of the companies liquidity thus it’s ability to pay its creditors and the efficiency of its Management team. A company may be profitable but can still be unable to pay its creditors.

I will email my answer to 4 of the assessment.

Cheers
Christine

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