1. Cash flow statements are provided with a column format.
2. Estimates of cash receipts and cash payments per month are shown in the respective columns.
3. The following steps are used to set up the Cash Flow Statement:
(a) start with cash advance balance (if any)
(b) mix all cash receipts on a monthly basis.
(c) deduct all estimated cash expenses for the month
(d) the remaining balance is the final cash balance
(e) the end of January will be the first balance of February and beyond.
4. Depreciation, bad debts, and provision for doubtful debts are accounted for as an expense or loss in accounting. However, these items are not recorded in the cash expenses section of the Cash Flow Statement because they do not involve cash outflows.