why account receivable are negative in the cash flow statement?
I took account years ago and now i'm review it online. but this cash flow statement baffled me.
the company earn $800 but money not yet received.
In the Good Deal Co. cash flow statement they put the $800 as a negative! why is that? i'm lost. could someone help.
I took this example from this link:
- shipwreckLv 77 years agoFavorite Answer
Ok they sold 800 worth of merchandise but they weren't paid at all.
They started the month with inventory and sold $500 worth for $800.
They had cash of 1,300 and still do since no cash changed hands.
The 300 net income was because they didn't get 800 they were owed so negative cash flow and sold inventory they didn't buy now so 500 positive cash flow.