Abstract
A conceptual foundation for the Statement of Cash Flows based on the ten elements of financial statements provides students with a deep understanding of core accounting concepts. Traditional methods of teaching the statement of cash flows tend to focus on statement preparation rules, masking the effect of business events on the change in cash. Accounting majors and non-majors alike both benefit from a clear understanding of the direct relationship between economic events and financial statement elements. This teaching note provides a conceptual illustration of the Statement of Cash Flows based on the ten elements of financial statements. The teaching method used is based on the belief that "keeping it simple" results in deeper understanding. This paper develops an equation for the Statement of Cash Flows directly from the Balance Sheet focusing on ten elements of financial statements. The equation analysis is followed by a flowchart illustrating the process and a simple numeric example.