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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the primary purpose of the statement of cash flows?

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

To show the changes in shareholders’ equity accounts over a period.

To report a company’s revenues and expenses for a specific period.

To present the financial position of a company at a specific point in time.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the purpose of the statement of cash flows. The statement of cash flows is a financial report that provides detailed information about a company's cash inflows (receipts) and outflows (payments) during a specific period.

Step 2: Compare the purpose of the statement of cash flows with the other options provided. For example, the statement of changes in shareholders' equity focuses on equity accounts, the income statement reports revenues and expenses, and the balance sheet presents the financial position at a specific point in time.

Step 3: Recognize that the statement of cash flows is unique in its focus on cash transactions, which helps stakeholders understand how cash is generated and used in operating, investing, and financing activities.

Step 4: Eliminate the incorrect options by matching their descriptions to the corresponding financial statements (e.g., income statement, balance sheet, statement of changes in equity).

Step 5: Conclude that the correct description of the primary purpose of the statement of cash flows is 'To provide information about a company's cash receipts and cash payments during a period.'