Section 1: 30–40%1A5
Statement of Cash Flows
The SCF is one of the most tested FAR topics. AICPA loves to test whether a transaction belongs in operating, investing, or financing — and whether it uses direct or indirect method.
What AICPA Wants You to Know
- 1Classify transactions as operating, investing, or financing activities
- 2Prepare the operating section using both the indirect and direct methods
- 3Identify non-cash transactions that must be disclosed separately
- 4Calculate cash flows from investing and financing using balance sheet changes
- 5Distinguish between free cash flow and cash provided by operations