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Last
but
not
least,
the
cash
receipts
and
payments
related
with
these
income
and expenses are necessary to be determined.
Step 2: Investing and Financing Activities
Nest
after
the
first
step is
complete,
the
company
is
now
required
to
analyze
changes in non-
current assets and liability accounts which later need to be
recorded as investing and financing activities or as major non-cash
transactions.
Increase
in
land,
increase in equipment, increased in bonds
payable, increase in ordinary shares and increase in retained earnings are items
which should be recognized in the investing and financing activities.
Step 3: Net change in cash
Last, comparing
the net change
in cash on the cash
flow statement of cash with
the change in the cash account reported on the balance sheet to reassure that the
amounts
agree
is
the
last
step
that
need to
be
done
for
preparing
statement
if
cash flow using the DIRECT method.
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