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

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Which of the following best represents the formula for cash flow to stockholders?

Operating cash flow minus capital expenditures

Net sales minus cost of goods sold

Dividends paid minus net new equity raised

Net income plus depreciation

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Verified step by step guidance

Understand the concept of cash flow to stockholders: It represents the amount of cash distributed to shareholders after accounting for any new equity raised during the period.

Identify the components of the formula: Dividends paid represent the cash distributed to shareholders, while net new equity raised refers to the cash inflow from issuing new shares.

Formulate the equation: Cash flow to stockholders = Dividends paid - Net new equity raised.

Clarify why other options are incorrect: Operating cash flow minus capital expenditures relates to cash flow from assets, net sales minus cost of goods sold relates to gross profit, and net income plus depreciation relates to cash flow from operations.

Apply the formula in practice: To calculate cash flow to stockholders, gather data on dividends paid and net new equity raised from the financial statements, then subtract net new equity raised from dividends paid.