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

Which of the following is an example of a cash inflow from a financing activity on the statement of cash flows?

Receiving interest income

Selling equipment for cash

Issuing common stock for cash

Collecting cash from customers

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Verified step by step guidance

Understand the classification of cash flows: The statement of cash flows categorizes cash flows into three main activities: operating, investing, and financing. Financing activities involve transactions related to obtaining or repaying capital, such as issuing stock, borrowing, or repaying debt.

Analyze the options provided: Review each option to determine which activity it belongs to. For example, 'Receiving interest income' is an operating activity, 'Selling equipment for cash' is an investing activity, and 'Collecting cash from customers' is also an operating activity.

Focus on financing activities: Financing activities typically include actions like issuing stock, repurchasing stock, borrowing funds, or repaying loans. These activities directly relate to how a company finances its operations and growth.

Identify the correct example: Among the options, 'Issuing common stock for cash' is a clear example of a cash inflow from a financing activity because it involves raising capital by selling ownership shares in the company.

Conclude the classification: Confirm that 'Issuing common stock for cash' aligns with the definition of financing activities, as it represents a transaction where the company receives cash in exchange for equity, impacting the financing section of the statement of cash flows.