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

Significant Noncash Activities

Financial Accounting

13. Statement of Cash Flows

Significant Noncash Activities

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Multiple Choice

Which of the following is considered a significant noncash activity in financial accounting?

Collecting cash from customers

Purchasing inventory with cash

Issuing common stock to acquire land

Paying cash dividends to shareholders

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Verified step by step guidance

Understand the concept of noncash activities: Noncash activities are transactions that do not involve cash but still have a significant impact on the financial position of a company. These activities are disclosed in the notes to the financial statements or in a separate schedule accompanying the statement of cash flows.

Review the examples provided in the problem: Analyze each option to determine whether it involves cash or is a noncash activity. For example, collecting cash from customers and purchasing inventory with cash are cash transactions, not noncash activities.

Focus on the correct answer: Issuing common stock to acquire land is a noncash activity because it involves exchanging equity (common stock) for a tangible asset (land) without the use of cash.

Understand why this is significant: Noncash activities like issuing common stock to acquire land are important because they represent major investing or financing activities that affect the company's financial position but are not captured in the cash flow statement.

Learn how to report noncash activities: Noncash activities are typically disclosed in a separate section or note in the financial statements to ensure transparency and provide a complete picture of the company's financial transactions.