Dear Rika,

Thank you for your tenth message. My comments follow.

Sincerely,

Prof. Sue Stiner

> Dear Prof. Susan Stiner

> Hello!

> Kei skipped class because of a soccer game.

>>A yukata is for summer wear, right? Is it for special occasions?

>>What color was your yukata?

> Yes, it is. Yukata is a light kimono usually made of cotton.

> It is worm in summer. Some people wear yukata when they take a walk or when they sleep in summer.

My yukata is a morning glory pattern in blue.

I love blue! We see some yukata material here. It is used in quilts.

The blue patterns are the loveliest, I think.

>>When is the next festival? Will you wear something special at the festival?

> The New Year. No, I won't.

Isn't there a festival next week?

> I look at Halloween.

> HOMEWORK

> 1. Why is the Statement of Cash Flows important to U.S. users of accounting information?

> Stockholders want the main business of the company to generate cash .

> U.S. investors respond to changes in cash flows. Healthy cash flow means a healthy company.

The Statement of Cash Flows shows all the reasons for the cash increases and decreases.

Correct!

> 2. Look at the table that compares the direct and indirect methods. What is the main

> difference between the indirect and direct methods a. in operating activities?

The direct method independently analyzes each balance sheet non-cash account for changes caused by cash transactions.

The indirect method starts with Net Income on the Income Stateement and cash transactions omitted from income are included.

Correct!

> b. in investing activities?

> no differences

Correct!

> c. in financing activities?

> no differences

Correct!

> 3.How do Japanese companies report their changes in cash during the year?

> This source may help in answering this question: http://www2g.biglobe.ne.jp/~ykawamur/n980107.htm

> It is an unofficial source of Japanese accounting information.

> Japan was different from U.S. until now.

> the Ministry of Finance (MOF), issued on December 22, 1997, an exposure draft, "Opinions on Setting Accounting

> Standards for Consolidated and Parent-Only Cash Flow Statements."

> The BADC issued "Opinion on Reviewing Reporting System of Consolidated Financial Statements" in June 1997.

> The concept of funds is based on a narrower view, which limits the funds only to cash and cas equivalents.

The format is based on three sections of cash flows from operating, investing, and financing activities.

The direct method and indirect method are alternatively allowed.

> In general, the cash flow statements in compliance with the proposed accounting standards would be internationally compatible.

Very good!

This week we learn about the role of the CPA. We also learn about the largest professional organization for CPAs,

the American Institute of Certified Public Accountants (AICPA).

The lesson is here: http://www72.homepage.villanova.edu/susan.stiner/cgu/CPArole02.htm

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