This approach encourages students to think about the effects of events rather than the memorization of recording procedures. Students are first asked to analyze the cash account. When the cash account is used as the data source, preparing a statement of cash flows is simply a matter of learning how to classify events as operating, investing or financing activities. More complicated topics such as the indirect method and a T-account approach for the conversion of accruals to cash are covered in Ch. 12. This allows students to first grasp the big picture relationships associated with articulating financial statements.
Individual instructors can decide the level of emphasis to place on recording procedures.
There are ample end of chapter problems that require the use of debits and credits, journal entries, T-accounts and other technical recording procedures. However, a significant number of problems and exercises focus exclusively on how business events affect financial statements. The McGraw-Hill Companies. Any use is subject to the Terms of Use and Privacy Policy .