Publication Date


Document Type


First Advisor

Norton, Curt

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy


The methods of reporting cash flows has undergone continuous change since the late 1800's. My objective of writing this paper was to determine if the current method of reporting cash flows, the Statement of Cash Flows, is more useful than prior cash flow statements like the "Funds" Statement or the Statement of Changes in Financial position. This paper discusses: 1) the history of reporting cash flows, 2) problems associated with past methods, 3) current cash flow reporting requirements, 4) why current methods are better than old methods, and 5) the improved ratio analysis possible with the information derived from the Statement of Cash Flows. My research from accounting text books, journals, magazines, and actual financial statements (Quaker Oats) has helped me determine that the Statement of Cash Flows is more useful than prior statements; it meets the objectives of financial reporting, allows a comparable presentation of cash flow information, and is easier to understand. Many improvements have been made to cash flow reporting, however, as explained by Arthur Stone Dewing, there is always room for more improvement.


42 pages




Northern Illinois University

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