A medium/large company does not require a cash flow
statement if it is a subsidiary and for a small company it is an
optional disclosure. If you require a cash flow statement, check
the option on
the Create/Print screen.
First Choice Final Accounts automatically produces a cash flow statement
from two postings files - the current posting file and the prior
period's posting file. If there are inconsistencies in the closing balances
of one and the opening balances of the other then the software will alert the user.
For the first accounting period entered in First Choice Final
Accounts, a prior period posting file is, perforce, not available and
a cash flow statement cannot be created in the normal way.
If a cash
flow statement is required in the first period, the closing balances for
assets & liabilities for
the prior year must be entered in the Cash flow
reconciliation screen. (Use the previous period's closing trial
balance or accounts). Tangible fixed Asset Costs and Accumulated Depreciation
balances are already accounted for by the program, so ignore
these, but the other
balances (non-tangible fixed assets, stocks, debtors, creditors, share capital, taxation, etc) should be entered
in the adjustments column as appropriate. The adjusted cash flow total
should be zero, otherwise the cash flow statement will not balance.
There
can be only two reasons why the reconciliation does not balance. Either
one or more opening balances has been incorrectly entered in the posting
file or the amounts entered in the adjustment column are wrong.
First Choice Final Accounts will not produce valid accounts when the
cash flow option is selected and the cash flow statement does not
balance. You can inspect a generated cash flow - balanced or
otherwise - by using Quick View
If the first accounting period entered is the first trading period,
then obviously there are no closing balance to adjust for and the cash
flow statement will be automatically reconciled by the software.
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