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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

The purchase and sale of long-term assets and current investments are classified as which type of cash flow activity on the statement of cash flows?

Non-cash activities

Investing activities

Operating activities

Financing activities

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Verified step by step guidance

Understand the classification of cash flow activities: The statement of cash flows categorizes cash flows into three main types: operating activities, investing activities, and financing activities. Non-cash activities are disclosed separately and do not involve actual cash flow.

Recognize the nature of the transaction: The purchase and sale of long-term assets and current investments involve changes in the company's investment portfolio or fixed assets, which are typically classified under investing activities.

Differentiate between the categories: Operating activities involve day-to-day business operations, such as cash received from customers or cash paid to suppliers. Financing activities involve transactions related to raising capital or repaying debt, such as issuing shares or repaying loans. Investing activities focus on the acquisition or disposal of long-term assets and investments.

Relate the transaction to investing activities: Since the purchase and sale of long-term assets and current investments directly impact the company's investment portfolio, these transactions are classified as investing activities on the statement of cash flows.

Confirm the classification: Ensure that the transaction does not fall under operating or financing activities, and verify that it aligns with the definition of investing activities, which include cash flows related to the acquisition and disposal of long-term assets and investments.