Cash: the calculations and the Statement of Cash Flows (every paper, Q3)

Reconstruct the receivables or payables account, then build the section. Exam-style Cash received from accounts receivable Opening

2 400; credit sales $58 000; bad debts written off $600; closing $9 800. Opening 12 400 + credit sales 58 000 = 70 400 owed in total during the period Less bad debts written off 600 → 69 800 collectable Less closing balance still owed 9 800 Cash received = $60 000 ✓ $60 000. Label the working: the method marks are awarded on the reconstruction, not just the final figure. ✕

Non-cash items in the cash statement

Depreciation, doubtful debts and bad debts written off never appear in a cash receipts or payments section. They are adjustments to profit, and no cash moves for any of them.

Reconstructing an account when the formula alone feels risky

Draw a T-account (or use the ledger format) with the account's known opening balance on the correct side.
Post every OTHER known movement (credit sales, bad debts, etc.) to its correct side.
The closing balance you are given becomes the balancing figure — whatever amount makes the two sides equal IS the cash movement you were asked to find.
This reconstruction method gives the identical answer to the formula, but is far less error-prone when a question adds an unusual item (a dishonoured cheque, a contra entry) that does not fit the standard formula.

Practice for this standard covers the whole topic — flashcards and quiz.