Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

13. Statement of Cash Flows

Introduction to the Statement of Cash Flows

Financial Accounting

13. Statement of Cash Flows

Introduction to the Statement of Cash Flows

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Multiple Choice

The statement of cash flows is useful because:

It shows the company's profitability over a period.

It lists all of the company's assets and liabilities at a specific point in time.

It details the changes in shareholders' equity during the period.

It provides information about a company's cash receipts and cash payments during a period.

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Verified step by step guidance

Understand the purpose of the statement of cash flows: It is a financial report that provides information about a company's cash inflows (receipts) and outflows (payments) during a specific period.

Recognize that the statement of cash flows does not focus on profitability, which is covered by the income statement, nor does it list assets and liabilities, which are part of the balance sheet.

Identify that the statement of cash flows does not detail changes in shareholders' equity, as this is the role of the statement of changes in equity.

Learn the three main sections of the statement of cash flows: operating activities, investing activities, and financing activities, which categorize cash movements based on their nature.

Conclude that the correct answer is: 'It provides information about a company's cash receipts and cash payments during a period,' as this is the primary purpose of the statement of cash flows.