Cash flow

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aman

aman (Querist)
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16 February 2012 how do contra entries treated in cash flow statement.?

CA Rushikesh Kolhe

CA Rushikesh Kolhe (Expert)
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16 February 2012 Just ignore the effect of contra entry while preparing cash flow. As at the end you dont have to tally the balance in banks or cash account individually. What we tally at the end is total of cash and cash equivalnt accounts. N as contra entry, it is just transfer from one cash or cash equivalent account to other cash or cash or cash equivalent account. It is not at all actual outflow or inflow of cash. Your amount remains with you only but only in other pocket

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aman

aman (Querist)
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21 February 2012 say where we receive the cheque, deposit the cheque in the bank and then get the amount withdrew from bank.how will this be treated in cash flow statement.??

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CA Rushikesh Kolhe

CA Rushikesh Kolhe (Expert)
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21 February 2012 You will have to take effect of cheque received and deposited. Do not consider the amount withdrawn. It is not actually receipt or payment, At the end we match total receipts and payments with cash and cash equivalent in agree-gate and not cash or bank balance individually