Table of contents

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 does not include which of the following sections?

Investing activities

Retained earnings activities

Financing activities

Operating activities

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Verified step by step guidance

Step 1: Understand the structure of the statement of cash flows. The statement of cash flows is divided into three main sections: Operating activities, Investing activities, and Financing activities. These sections categorize cash inflows and outflows based on their nature.

Step 2: Clarify the purpose of each section. Operating activities include cash flows related to the core business operations, such as receipts from customers and payments to suppliers. Investing activities involve cash flows from the purchase or sale of long-term assets, such as equipment or investments. Financing activities include cash flows related to borrowing, repaying debt, or issuing equity.

Step 3: Recognize that 'Retained earnings activities' is not a section in the statement of cash flows. Retained earnings are part of the equity section on the balance sheet and represent accumulated profits that are not distributed as dividends. They are not categorized as cash flows.

Step 4: Compare the given options to the actual sections of the statement of cash flows. The correct answer is 'Retained earnings activities' because it does not belong to the statement of cash flows.

Step 5: Reinforce the understanding that the statement of cash flows focuses on cash transactions and does not include non-cash equity accounts like retained earnings.