The statement of cash flows reconciles the beginning cash total to the ending cash total by showing cash inflows (sources) and cash outflows (uses). The statement shows the companys ability to pay future cash obligations.

The statement is divided into three parts: operating, investing, and financing activities. In your post, address the following:

Describe the three parts of a cash flow statement and indicate which transactions affect each part.

Give examples of non-cash investing and financing transactions and state how they are reported.

Explain the difference between the cash flow statement indirect and direct method of reporting.