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 best describes the financing activities section of the statement of cash flows?

It reports cash flows related to borrowing from and repaying principal to creditors and transactions with the company's owners, such as issuing or repurchasing stock and paying dividends.

It reports cash flows from the purchase and sale of long-term assets, such as property, plant, and equipment.

It reports cash flows from the company's core business operations, including receipts from customers and payments to suppliers and employees.

It reports only non-cash investing and financing activities that do not affect cash directly.

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Verified step by step guidance

Step 1: Understand the concept of financing activities in the statement of cash flows. Financing activities involve transactions that affect the company's capital structure, such as borrowing, repaying debt, issuing stock, repurchasing stock, and paying dividends.

Step 2: Review the options provided in the problem. Each option describes a different section or aspect of the statement of cash flows. Identify which one aligns with the definition of financing activities.

Step 3: Eliminate options that describe other sections of the statement of cash flows. For example, cash flows from the purchase and sale of long-term assets are part of investing activities, and cash flows from core business operations are part of operating activities.

Step 4: Consider the option that mentions non-cash investing and financing activities. These are disclosed in the notes to the financial statements but are not part of the financing activities section itself.

Step 5: Select the option that accurately describes financing activities, focusing on transactions related to borrowing, repaying principal, issuing or repurchasing stock, and paying dividends.