Prepare A Cash Flow Statement | Direct Method

[@AccountingStuff]

This one is a beast! But I didn't want to skip any steps in calculating Cash Flow with the Direct Method because there's a lot going on in there. How did you guys find this style of learning? I like to try out new things to see what people find most effective. Big thanks to everyone who has supported the channel by subscribing! As I type this the channel is sitting at 999, so hopefully we will have 1,000 by lunch. Always appreciate your comments, so please let me know what you would like covered in future videos!

[@krishnarajput8209]

Bro did you do that vid on fixed assets and depreciation yet ?

[@darlingtonchipumuro9380]

Journal entries for company acc

[@lisamccray6481]

Dear James, I thought I might try to respond to your question. You are of the pedigree of Quality. This particular video, as you said, is a beast. But you slayed it. It was no match for it's maker. That said, we are not you. I was trying to hold back tears when trying to get the points you were making. People say these videos are easy in order to thank and/or impress you because you are the best in the business. Dear James, I reviewed this video several times. Some of us struggle with the concept of negative and positive numbers. It took me quite while to realize that the number on the left (or debit side) starts off (the calculation column) as a positive, while the numbers in tow are negative. And on the Credit side of things... The top number begins as a -/Negative while the numbers in tow are positive. So I almost gave up trying to realize that. When the light finally came on, oh what a relief. Though it took me forever to realize this, without you and your descriptions and T account illustrations, how would I have ever realized it? So, as difficult as I personally found this concept, initially, because YOU were the instructor, I kept at it. You pride yourself on the vocabulary words you've chosen; an "old school" thing. Back when a vocabulary word was "from the Latin this or that." So my eyeballs bled as I focused on those words of yours until I understood your point. IJS. Again, it's like you said, enjoying a classic book. You are a "different person" at the end of a great book. I feel that way whenever I finally learn from your teaching. This stuff is not easy. It's compressed. But, thanks to you, it is at least at the top of the hill. I now have to go up there and get it. Did you see Kong Fu Panda? Stairs. Well, anyway, I've got it now. It's a warm and fuzzy feeling. Otherwise known as gratitude.

[@AccountingStuff]

@@lisamccray6481 Thanks for your kind words! I'm so happy to hear that it's clicking for you. All the best :)

[@المحاسبخبرة]

برجاء ادعمنى بالاشتراك وشكرا لحضرتك

[@hounamao7140]

Finally a video that explains HOW to make the statement and not WHAT the statement is, it was so hard to find yet it is such a basic thing.. Thank you!

[@AccountingStuff]

No worries Houna!

[@jeffmaxwell5350]

I'm a high school business teacher, and these videos help me so much when I'm teaching accounting. Thank you, James. These're great.

[@AccountingStuff]

No problem Jeff, that's great to hear!

[@wiserabota8014]

Me too. This will be of great help to my students. Thanks a lot.

[@Dgaf001]

I'm impressed with you sir. You care enough about your students to learn creative ways to help them understand what you teach! Bravo!

[@xianxiong3440]

high school teaches accounting now?

[@tiff-joyce]

​@@xianxiong3440 maybe it depends on the country. In my country,Kenya, it is taught in high school.

[@libertejayez706]

You are just a live saver, I am a first-year student in a business school and I wish I had an accounting teacher like you. Your videos are amazing and so easy to understand I just bought all you cheat sheet. Thank you so muuchh

[@AccountingStuff]

Thanks for your support! All the best with your studies :)

[@bookswithisha]

Hey, I will be starting my studies in Canada next month can you suggest me an accounting book that I can start practicing now, as I have plenty of tie left.

[@ABC-jq7ve]

I really appreciate the artistry that goes into your videos (the beautiful handwritten visuals, the sound effects, it's amazing). So much dedication to visual/sensory interest. You are a talented man.

[@AccountingStuff]

Thanks for your kind words!

[@user-aymanzone]

Best Thing Ever: I didn't understand how T-Accounts were used in this example but thanks for video about Debits vs. Credits explaining source vs destination and it becomes very clear. This channel deserves way more subs

[@AccountingStuff]

Cheers Ayman! Great to hear it's clicking for you

[@WhoHasSoul]

Best KZbin channel about accounting. Clear, informative, no water!

[@AccountingStuff]

Thanks Irene!

[@blackm9063]

10 out of 10 explanation for the cash flow. The best person to listen to explaining such topic.

[@AccountingStuff]

Thanks Mohamed!

[@nadiab.8869]

I came here for info about the cash flow statement and ending up staying longer than I expected because of the charming young man in the video! Oupsie!

[@AccountingStuff]

Haha, thanks you are too kind!

[@RajatSrivastava19593]

you need to do some marketing for your videos. Your videos are the best I have found on the youtube and are better that what is given in CFA books. The views need to go up.. Thanks a ton

[@AccountingStuff]

Thanks Rajat! I would love to spend more time marketing the videos but I don't have enough time. Cheers for the support, I appreciate it.

[@المحاسبخبرة]

برجاء ادعمنى بالاشتراك وشكرا لحضرتك

[@christinachampion8678]

The best Instruction on how to prepare a Cash Flow Statement. The best I have ever seen. Thanks a million for helping to increase my understanding and eliminate the confusion. None of my instructors in the university, explained Cash Flow Preparations this well. You're awesome! James. Thanks!

[@robsessedddxoxo]

Woah this video needs way more views! Thanks for saving me for my finals!!

[@AccountingStuff]

Cheers, glad to hear it helped with your exams. Hope they went well!

[@btodtenhoefer]

Just found these videos, studying to finish my degree, and oh man they are helping so many different concepts click for me. Thank you so much man!

[@AccountingStuff]

No worries, all the best with finishing your course!

[@timtam9231]

OMG! I have to say this video is awesome and so easy to understand since the way you explain this concept makes me feel excited instead of falling asleep like I normally do when listening to my lecturer. Thank you so so much. I feel much more confident about my final exam in the next 3 weeks

[@AccountingStuff]

Glad to hear that it makes sense. Good luck in your exam!!

[@helenday5031]

Lovely clearly presented, well-paced lesson which helped me understand it much better than my text book, which was beginning to feel like being forced to read a mass of terrible small print which didn't help at all (and it felt like the author wasn't actually TRYING to explain it, it was more like a list of words). Thank you so much for explaining so clearly how one can use T accounts to work out cash flows, you're an angel, it's brilliant. I'm 63 now and during a lifetime have had experience of good and bad teachers and if there was a Teachers' Walk of Fame, I would nominate the presenter of this video to put his hand print somewhere on that walk.

[@AccountingStuff]

Thanks for the kind words Helen!!

[@jcc644]

Amazing teaching style! Very clear and easy to understand. Makes a dull subject very entertaining!

[@AccountingStuff]

Cheers buddy

[@nathanarant1138]

THANK YOU FOR MAKING THIS VIDEO. As a business operator, I was frustrated by the uselessness of the indirect cashflow statement that my software generated. Now I understand why. The direct cashflow statement is the one that I so badly want!

[@Michael_CDK]

I don't know if you'll see this, but I wanted to thank you anyway. I studied business accounting when I was in college, but I ended up making a career in a different field, so it's been years since I've done anything with that knowledge. Recently, I've wanted to give myself a recap as a just-in-case. Not only did so much of what you talked about in this and the previous video bring back what I learned quicker than I thought it would, but the way you explain things is so clear that I remember how I first learned some of it, like inventory, and wonder how I struggled with it the first time. You and your channel are a gem. I hope you continue to find success.

[@AccountingStuff]

Hey Michael, thanks it's great to hear that you're finding these videos helpful

[@wjaao]

no text books or online education website can do better than he does! Thank you for this great video

[@AccountingStuff]

Thanks for your kind words!

[@smritiiparajuli1723]

How could someone dislike this video🙄 Great video sir..very helpful..much love.

[@harietam3194]

THANK YOU SO MUCH!!!! I have an accounting exam next week and this is my first time ever doing the subject (Im in my first year of college) and jeez its so hard finding quality videos like this, your video was so much help compared to what my coordinator taught us!

[@AccountingStuff]

No worries Harieta, good luck for your exam!

[@ethan-zq6kx]

Why it is so hard for me to understand this :(

[@abdulhadiashrafi1342]

This is the best cash flow direct method video ever. It really helped me for my exam. Great work James. Thank you so much. 👍

[@md.mahmudulhasan748]

No one explained like you before. Thank You.

[@ThinkForward0]

in my exam there was an entry called income before tax. There was other entries that we have to use to make a direct cash flow statement. I didn't know where to put it so I didn't include it at all. Was I correct please help!!

[@mimichooo]

learning accounting from your videos, watching it one by one. the best! thanks!

[@AccountingStuff]

Hey Sophia, that's awesome to hear. Best of luck!

[@alejguz1552]

I've been struggling to understand this for a couple of hours and after watching your video everything clicked! Thanks!!

[@AccountingStuff]

Great to hear it's making sense!!

[@minhannah8032]

Gosh I appreciate you so much for taking times to make these videos.

[@joycekang4343]

tqq i just learn cashflow in 1 hour by watching all ur vids!!! its so helpful

[@AccountingStuff]

Glad it's making sense :)

[@elenacapulong9766]

Thanks very much for this detailed, simplest and easiest explanation of the direct method! You are awesome!

[@AccountingStuff]

You are very welcome! Hope it helps!!

[@Dilettax]

Ti amo! Thank you so much for explaining it that way, you’re amazing and you saved me! I watched all the ads hoping It’ll be helpful♥️

[@nikhilpawath]

Your are an amazing teacher.

[@AccountingStuff]

Thanks Antony :)

[@CountessDraculaBlueSky]

Why the hell did i just found this video? This is like the most useful for people like me who needs a step by step calculation to understand. Thank you so much for this. I have a cash flow statement project due tomorrow.

[@AccountingStuff]

Good luck for your project! Hope you smash it!!

[@CountessDraculaBlueSky]

@@AccountingStuff thank you so much

[@mtfiji09]

You just made my understanding of this method alot more understandable for my homework.....TY so much!!

[@AccountingStuff]

Happy to help!

[@vtrofimova]

Thank you so much, James! I'm 34 and in a program that lets non-accounting majors get a masters in accounting .... so they throw us straight into intermediate in our first semester! Our class videos demonstrate the direct method by using a mega excel spreadsheet that doesn't fit on screen and just has numbers and words everywhere, it makes my eyes glaze over and I can't follow where the numbers are coming from and what we're adding and subtracting in the columns as we move around this spreadsheet. Your video explains the concepts clearly and in 1/3 of the time. Thank you so much.

[@AccountingStuff]

No worries Veeka! That spreadsheet scares me and I haven't even seen it. All the best with your studies

[@annieguo1595]

This is so helpful!! You can explained it way better than both my textbook and lecturer did! Subscribed :)

[@AccountingStuff]

Thanks Annie, great to have you on board!!

[@sergiob2850]

Thank you so much! I'm watching videos from my lecturer the whole day now and didn't get it... Now I understand it! Thanks

[@AccountingStuff]

Great to hear it's making sense :)

[@marcuss3063]

Excellent video! Absolutely loved how you succinctly covered what my professor in university took 3 hours to do (and was still unclear about it, thus I am here)! Also appreciate all the attention to detail in the little things like sound and editing. Thank you!

[@AccountingStuff]

Thanks Marcus! I'm glad to hear that the video helped :)

[@sinjynbunge8487]

You make learning accounting so fun and interesting! I was thinking of dropping this module for second year of university but you make me second guess that - accounting seems so cool when you teach it!

[@AccountingStuff]

You've got this!

[@hainguyen666]

Many tks with the instruction to prepare Cash flow statement One of the best channels for Accounting

[@AccountingStuff]

Thanks!

[@hainguyen666]

@@AccountingStuff i have a suggestion that you can do more about this, for example: IFRS, GAAP, Auditing,... Many thanks :)

[@AccountingStuff]

@@hainguyen666 Thanks for your suggestions!

[@zibuko_productions]

Best cash flow explanation ever.

[@AccountingStuff]

Thanks!

[@lasagne71]

Thanks for the vid, simple yet concise. A life saver. At 1st i was confused, b/f and c/f are on the same side, for me c/f is a balancing figure to balance out the account

[@mikiri3927]

Man, you explain better than my teacher. Tysm!

[@AccountingStuff]

No problem, hope it helped!

[@chill_lele]

This video literally saved me!!! You made this super easy to follow and to apply. Thank you for being amazing!!!

[@AccountingStuff]

Glad it helped!

[@chloeaw5852]

Your illustrations are marvelous, alongside the simplified steps. Well done.

[@AccountingStuff]

Cheers Chloe!

[@theapplekid13]

Studying for my Intermediate Accounting Exam and this video has been more useful than my textbook. Would appreciate if you could make a video about calculating Earnings per share ( Basic/Diluted)

[@AccountingStuff]

Thanks Dami, I'm glad you found it helpful! Cheers for your suggestion

[@collinskibet2992]

Your work is amazing 😍, you are better than My accounting lecturer. James could you please consider including share capital in preparation for the cfs.

[@AccountingStuff]

Thanks for your request!

[@collinskibet2992]

@@AccountingStuff waiting for that video James

[@banushaudhayakumar9399]

Would like to thank you for. Making this complicated thoughts for minute one

[@ThinkForward0]

in my exam there was an entry called income before tax. There was other entries that we have to use to make a direct cash flow statement. I didn't know where to put it so I didn't include it at all. Was I correct please help!!

[@Seaspray127]

I am an accounting student. Thank you for the step by step explanation. I'm going to try the question on the quiz again.

[@AccountingStuff]

Good luck with the question!

[@morpheus4241]

Thank you! Big help for me, tomorrow is our examination and this summarized it all!

[@AccountingStuff]

Good luck!!

[@tamerakkad9129]

Your videos are very helpful. Thanks 😊

[@AccountingStuff]

Thanks, that's great to hear :)

[@shihabisa7108]

Thanks so much mate! You are so much better than my teacher.

[@AccountingStuff]

Cheers for your kind words!

[@DanielDuhon]

At 6:05, it would help greatly to include the arithmetic signs you used to get that. It’s not -42 less 80 less 30, it’s (-42) + 80 + 30, MUCH different interpretation from a math perspective. Otherwise, this really helped! Edit: I understand actually, it’s really (-42) - (-80) - (-30), got it now

[@roycevo4696]

Thank you James, you have made Accounting makes sense!

[@sodabaniazi4973]

Thank you so much for the detailed explanation. I was looking for direct method with t-accounts calculation and I finally found it.

[@AccountingStuff]

Hey Sodaba, you are very welcome. I hope you found it helpful!

[@sodabaniazi4973]

@@AccountingStuff Thank you for the quick reply. Can you make a video on gain/loss on equipment with the help of t-accounts? I am struggling on how to get the cash amount when equipment, , accumulated deprecation and given loss/gain amount is given in the question.

[@tinamkhize4518]

@@sodabaniazi4973 thank you for this...please do one example that needs expenses adjustments like depreciation, profit on sale of asset and finance costs in the "cash paid to suppliers"

[@Vivek1212121212]

Your videos have an impactful learning .. thanks

[@AccountingStuff]

Cheers Vivek!

[@임승주-f6d]

I’ve seen all of your videos. This is really helpful! Thank you James

[@AccountingStuff]

Cheers, hope you're finding them helpful!

[@seisopheapanya7528]

Thanks a lot, Sir. Appreciated your devotion in helping us catch these things well.

[@adrianhearle2076]

the example really helps and very clear - well done

[@AccountingStuff]

Thanks Adrian!

[@heatherk9629]

Thank you for your videos! They are so helpful.

[@AccountingStuff]

Cheers Heather, all the best!

[@carlosvidaurre7329]

Awesome explanation! Thank you so much

[@AccountingStuff]

Cheers Carlos, you're welcome :)

[@parmoksha]

I watched last 2 videos on direct methods 3-4 times. understood 60-70% . they are toughest video in accounting playlist so far.

[@parmoksha]

i think problem was that you directly went to example. You should have first explained concept

[@AccountingStuff]

Thanks for your feedback! I have made an updated version of this video which you can find here: kzbin.info/www/bejne/epq5gXSgnNKhoJI

[@md.abdurrob8229]

Really so much helpful videos.. It builds stronger surface of understanding..

[@AccountingStuff]

Cheers, great to hear you're finding these useful!

[@davidcolecontreras3759]

Your videos are very helpfull keep doing what you're doing

[@AccountingStuff]

Cheers David! Will do :)

[@portiafielies4976]

hallo James, thank you for this video, your videos are helping me a great deal with my studies ..you have no idea how grateful i am to you for doing this

[@AccountingStuff]

All good, I'm happy to help :)

[@willsze1242]

Clear and easy way to learn the cash flow , much appreciated your afford ! 🤜

[@AccountingStuff]

Awesome, glad it's making sense

[@wandilendayini2319]

THANK YOU JAMES, ACCOUNTING YOU SAVE MY LIFE

[@AccountingStuff]

No problem Wandile :)

[@deepama2342]

Well, second one to like the video.... Again! A great video!!!!😄😁👍

[@AccountingStuff]

Haha, thanks... I'll give you a heads up next time!

[@deepama2342]

@@AccountingStuff thx a lot 🙃👍

[@AccountingStuff]

@@deepama2342 no worries 👍

[@shellongarner652]

This video has just helped me so much. Thank you

[@AccountingStuff]

Cheers, glad you're finding it useful!

[@gauravrai5784]

Sir you are great im a charterd accontancy student and i love the way you teach😍😍😍

[@gauravrai5784]

Im from india

[@AccountingStuff]

Thanks mate! Glad you're enjoying these

[@lesicarew3106]

you just got a new subscriber

[@andininurul609]

Thank you so much for making this video! 👍❤️

[@AccountingStuff]

You're most welcome

[@ThyInfamousAssassin]

You sir are a life saver, thank you so much!

[@AccountingStuff]

No worries :)

[@rekekamsalu4901]

Thank you is understatement !!!!

[@AccountingStuff]

You're welcome :)

[@newschannel3794]

Buddy your videos are awesome it's very helpful 🔥

[@AccountingStuff]

Cheers Deepak!

[@nachecrunche]

Thank you for that explanation I've just subscribe to your channel.

[@user-vh1gc1ct6z]

You are getting appreciations from everywhere but this is going to be most wierd one my family is full of finance related professionals but i wanted to study higher level mathematics and so i used to get delineated from my studies (for C. A. ) and as a consequence i used to loose interest in this course and often found myself into this dilemma that whether i should study it or not but the way you post videos it makes accounting more interesting to me

[@AccountingStuff]

Hey Akarshit, it's great to hear that you're becoming more interested in accounting. Good luck in your studies!

[@user-vh1gc1ct6z]

@@AccountingStuff thanks :)

[@deathknight02]

You helped out so much with this video

[@AccountingStuff]

Glad it's making sense!

[@deathknight02]

SO FEAKING HELPFUL!!!!!

[@fatimahazam2938]

Hi James, I would say so far Cash flow statements is the trickiest for me. Could you make a video to show more examples please such as how to account for gains/losses on PPE. And brief explanation of some of the jargon as you along. Big thank you for all your videos so far :D

[@AccountingStuff]

Thanks for your suggestions!

[@alishokrpour6180]

I wish you were my accounting teacher in my university

[@squirtle9990]

Very well explained compared to other videos. Thanks

[@AccountingStuff]

Cheers!

[@Arexsis]

Mate, this is beautiful. I'm using this to relearn some stuff for my 3rd yr acct class - so this can be a bit slow sometimes - but overall this is a huge help. Wondering if you'll go into more complex stuff ( like maybe 3rd year acct stuff ;] ). Thanks, and cheers

[@AccountingStuff]

Thanks Arexsis, I'm open to the idea of doing more complex topics but I wanted to cover the basics to begin with. Is there anything in particular that you'd like to see?

[@Arexsis]

Just starting Third-year stuff, so we just did some Second-year review and have moved onto cash flows (hence why I'm here ;)). Stuff like prepaid rent was tricky for a couple of us as we had to credit prepaid rent with the rent expense - which at first seemed weird to us because we figured if you were paying cash (aka expensing it) you'd be putting that cash into the prepaid. Obviously wrong now that we got things to balance. Long story short, I don't know yet, but I'm sure I'll have a better answer as the weeks go on. If there are more advanced topics on cash flows I'd be down to see it now as I'm sure it'll be relevant soon haha.

[@AccountingStuff]

@@Arexsis Cheers for getting back to me, I appreciate the feedback. Yeah prepaid rent is a tricky one, that's for sure. I want to make videos covering all these kind of topics but it'll take a while because there is a lot to cover. All the best for your third year, I'm sure you'll ace it!

[@StllrChick]

I watched it on 1.25x speed and it was the right pace for me. I could understand speaking slowly for beginners that need the pace to be slower.

[@yongjiancao6863]

It is so clear how to build a cash flow statement.

[@AccountingStuff]

Glad to hear it!

[@masempiregroup6753]

we will share to some others so they can learn

[@AccountingStuff]

Thanks, that's very kind of you!

[@aristojuan7926]

Best explanation ever, thank you sir!

[@AccountingStuff]

Glad you found it useful!

[@mohammedrafeeq8646]

Best teaching

[@AccountingStuff]

Thanks buddy

[@anushaji2361]

Thank you very much for this detailed video

[@AccountingStuff]

Cheers Anu!

[@jairotorres8284]

Great video! Really helpful, thanks bro!

[@AccountingStuff]

Cheers Jairo, glad you enjoyed it!

[@LUXLEACLOTHINGS_ACCESSORIES]

Thanks James. Your explanations are so friendly. Please can u explain the difference between Flow of Funds Analysis and Concept of Cash Flow

[@AccountingStuff]

Thanks for your requests!

[@bobbyliu9328]

thanks for your sharing. It's awesome.

[@AccountingStuff]

No problem :)

[@bobbyliu9328]

@@AccountingStuff Thanks for your sharing. Would you mind to introudce how to prepare BAS? Like GST, PAYG withholding, PAYG income tax instalment and FBT instalment.

[@AccountingStuff]

@@bobbyliu9328 Cheers for your suggestion!

[@roshanghadigaonkar8267]

Thanks bro.. it's really helpful ❤️🙌

[@AccountingStuff]

Cheers Roshan! Great to hear that you're finding the video useful

[@aramiqbaldesai834]

hello, is there a detailed video on investing and financing activities ( Cash Flow Statement). If not, can you please make one, your videos are a life saver!!! So thorough and easy to grasp!!! Thank you

[@AccountingStuff]

Thanks for your request!

[@crystalcoby]

Wow this is seems like a big leap and I'm having trouble getting my head around which figures need to be stated as negative and positive. Watched it twice, wrote it all down. I'm going to work through it bit by bit all over again. I'll let you know when I get the Eureka moment no matter how long that takes!

[@crystalcoby]

An hour later and I've got it! Feeling accomplished :) This example really helped me understand how the various accounts affect each other how they are reflected in the three tables. I really loved working through this with you, James. I would love a 'test yourself' example to practice with but I'm sure I'll have plenty to work through when I start my accounting course in a couple of weeks. Anyway I'm certainly more confident going into it since working through your videos.

[@AccountingStuff]

Hey Crystal, I'm glad to hear that you've cracked it! Cash Flow is a topic that most people have difficulty with. All the best in your new course!

[@ivancarlson953]

another way to think of it is, for the purposes of computing the cash flow statement, excluding the cash account, any debit to a balance sheet account is a cash outflow, and any credit to a balance sheet account is a cash inflow - think about it.

[@shiny_19]

Thank you so much!! I have a small doubt, on what basis did you assume purchase of PPE to be 70000? Can someone please clear this doubt?

[@kaileenackerman9069]

I'm a little over halfway through! Your videos have been very helpful, so thank you so much!! I understand most of this, but am getting confused by what's being added or subtracted. I keep rewatching the first portion of the T-Accounts going over Accounts Receivable. I get that if we make revenue the A/R increases, but why are we putting sales on the left-hand side vs on the right-hand side as it is a credit and the same with cash receipts?

[@chandrahasd23]

You are the best

[@anjulaperera7038]

This videos are really helpful to me pass my semester exams....but i would like to request from you..... can you please explain little bit slowly..because sometimes it's hard to understand theories because you are speaking speedly....anyway i really like the way you explain Accounting concepts.... Good luck!!!

[@AccountingStuff]

Best of luck in your exams and thanks for your feedback

[@Mewier]

3:33 I'm not quite sure why "Sales" is included here, and why the equation ends up being equal to "Cash receipts from customers". As I've understood it, Accounts Receivable is money that's going to paid to you, but hasn't been just yet. But "Sales" and "Cash Receipts" could be money that has already been paid? I've been thinking about it for a few days but I can't seem to wrap my head around it. Maybe I'm misunderstanding what it is we're trying to do. Huge thanks for these videos. Trying to make my way through the Basics for Beginners playlist. 🙌🏻

[@phinx400]

I have the same question! Unless none of the customers have paid Chudley Cannons I don't understand why sales is there.

[@phinx400]

Ohhh I figured it out. So sales includes all cash received or receivable, right? We solve for the portion of sales that have been received (Cash Receipts). Assume that nothing has been paid for the year, then accounts receivable would be all of the sales from this year ($250), plus the balance carried forward from last year ($98). The total accounts receivable would then be $98 + $250 = $348. However we know this isn't the case because our ending balance is only $120, so some of the accounts receivable must have been paid. If we take the difference ($348 - $120) we are left with how much was paid in this period, or "cash receipts" of $228.

[@stephenshapiro8404]

I was dealing with the same nose splitter. Thanks for articulating :) .

[@suryaprabakaran6507]

@@phinx400 Thanks for the explanation bro. I too got confused with this one

[@yuyafujikawa1729]

@@phinx400 Thanks for the explanation!

[@curiousmind4381]

Salute to you!!!

[@bleinyohannes1448]

YOU SAVED ME.

[@AccountingStuff]

No worries Blein!