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| *Loan,banking and credit>>>deferred tax |
How does accumulated depreciation, accrued liabilities, and deferred income tax changes affect the cash? |
flow statement? thanks =) Wow, all those answers are wrong!!! Accumulated depreciation doesn't affect the cash flow statement BUT depreciation and gain/loss on disposal do. Depreciation is added to net income as a non-cash item, gains on disposal are deducted from net income (minus any proceeds from the sale of an asset) and losses on disposal are added back to net income. Increases in liabilities are increases in cash flows while decreases in liabilities decrease cash flows. Increases in assets decrease cash flow while decreases in assets increase cash flow. Accrued liabilities are.....liabilities. Deferred income taxes can be an asset or liability. Source(s): ima CPA Accumulated depreciation is the amount of depreciation that has been take on a given property for tax purposes from inception to a given point in time, normally at disposition of the property. This amount may need to be recaptured or added to the base to determine your base in the property. Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable. Deferred income is compensation that has been earned but not yet paid directly to the person that earned it. It is normally put into some type of savings vehicle for the purpose of deferring the tax that would be due if the income was received by the person who earned it. for the cash flow statement you start with net income and add back depreciation expense because it's a non cash item. As far as the accounts you listed above, they are all on the balance sheet they have nothing to do with the statement of cash flows. all non-cash items. None of those affect the cash flow statement. They are all non-cash items. |
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