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

Selling equipment for cash is reported on the statement of cash flows under which section?

Supplemental disclosures

Financing activities

Operating activities

Investing activities

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Verified step by step guidance

Understand the purpose of the statement of cash flows: It categorizes cash transactions into operating, investing, and financing activities to show how cash is generated and used during a period.

Review the definition of investing activities: These include transactions involving the purchase or sale of long-term assets, such as equipment, property, or investments.

Recognize that selling equipment for cash is a transaction involving a long-term asset, which aligns with the definition of investing activities.

Differentiate this transaction from operating activities (day-to-day business operations) and financing activities (transactions related to borrowing or equity). Selling equipment does not fall under these categories.

Conclude that selling equipment for cash is reported under the 'Investing Activities' section of the statement of cash flows, as it involves the disposal of a long-term asset.