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

What is the primary purpose of the statement of cash flows?

To summarize changes in shareholders' equity during a period.

To show the profitability of a company over a period of time.

To provide information about a company's cash receipts and cash payments during a specific period.

To report a company's financial position at a specific point in time.

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Verified step by step guidance

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

Recognize that the statement of cash flows is divided into three main sections: operating activities, investing activities, and financing activities. Each section categorizes cash transactions based on their nature.

Compare the statement of cash flows to other financial statements: Unlike the income statement, which shows profitability, or the balance sheet, which reports financial position, the statement of cash flows focuses solely on cash movement.

Identify the importance of cash flow information: It helps stakeholders understand how a company generates and uses cash, ensuring it has sufficient liquidity to meet obligations and invest in growth.

Conclude that the primary purpose of the statement of cash flows is to provide information about a company's cash receipts and cash payments during a specific period, aiding in assessing liquidity and financial health.