Cash Flow Report

[David Harrison]

On 6/24/05, gnucash at madsteer.com <gnucash at madsteer.com> wrote:
> When I think of Cash flow or Net Earnings, I think of
> 
> Income - Expenses = Cash Flow

No, cash flow and net earnings are two different things!!

Income - expenses = net earnings

change in bank account from begining of period to end of period = cash flow.

The difference between the two arise as a result of accrual
accounting.  For example, if you record an account payable, you have
recorded an expense.  This expense decreases your net earnings. 
However, cash flow is not affected untill you pay the bill.  This may
occur in a different period.

> 
> for a given period of time.  I have no idea what gnucash's Cash Flow
> report is trying to tell me.  I end up with a positive difference that's 3
> times what my income for that period of time is.  When I go look at the
> options, the only accounts selected are Asset accounts, no Income or
> Expense accounts.

You should have almost all income and expense accounts selected,
unless they don't have a cash component.  You should also have all
asset and liability accounts selected, unless they don't have a cash
component.

What I mean by cash component is, was cash invovled in the
transactions.  One example of an expense without a cash component is
depreciation (or amortization).


> 
> The report talks about things like "Money into selected accounts from" and
> "money out of selected accounts goes to".
> 
> Anyway, when I wipe the account selections and pick all my expenses and
> income accounts that looks jacked up too.  Not sure what I'm missing.  Can
> someone explain how that report is supposed to work?
> 
> Thanks,
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> 


-- 
David Harrison, BAccS, CGA