ACCOUNTING-Chapter 23 Accounting in Action: CM2 You were looking forward to going to CM2

Chapter 23 Accounting in Action: CM2 You were looking forward to going to CM2 today since it was your last working day as an intern. Tomorrow the group is planning to take you to lunch tocelebrate the end of your internship. You figured today would be easy— justwrapping up loose ends.It was not to be. You walked in and found people with expectant faces,holding sheets of paper, and you could tell that another “issue” had arisen .Conner and Martin started right off: they saw no reason at all for a statement ofcash flows. They felt that CM2‘s cash flows were nobody’s business but thebank’s. Lopez and Knepp clearly were trying to explain that investors like to seewhere the cash flow was coming from and how the cash was being used.So once again, you were on the spot. By now, Conner and Martin havelearned to put their questions in writing so they were ready with a paper on whichthey had written:1. What is the point of the statement of cash flows?2. Why are there three categories of cash flow information?3. What can the reader learn from the “Cash flow from investing”section?4. What can the reader learn from the “Cash flow from financing”section?5. What is the difference between the direct and indirect methods forpreparing the “Cash flow from operations”?6. We have a copy of a statement of cash flows for another firm. Whyis this firm adding back depreciation?7. Someone told us that you could learn a lot from looking at theaccounts receivable adjustment to net income on this statement.We don’t understand this at all. What’s to be learned?