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 lists the correct order of steps in preparing the statement of cash flows?

1. Reconcile the net increase or decrease in cash; 2. Determine cash flows from financing activities; 3. Determine cash flows from investing activities; 4. Determine cash flows from operating activities.

1. Determine cash flows from financing activities; 2. Determine cash flows from operating activities; 3. Determine cash flows from investing activities; 4. Reconcile the net increase or decrease in cash.

1. Determine cash flows from operating activities; 2. Determine cash flows from investing activities; 3. Determine cash flows from financing activities; 4. Reconcile the net increase or decrease in cash with the beginning and ending cash balances.

1. Determine cash flows from investing activities; 2. Determine cash flows from operating activities; 3. Determine cash flows from financing activities; 4. Reconcile the net increase or decrease in cash.

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Verified step by step guidance

Step 1: Understand the purpose of the statement of cash flows. It is designed to show how changes in balance sheet accounts and income affect cash and cash equivalents, categorizing cash flows into operating, investing, and financing activities.

Step 2: Begin with cash flows from operating activities. This section reflects the cash generated or used by the core business operations, typically starting with net income and adjusting for non-cash items and changes in working capital.

Step 3: Proceed to cash flows from investing activities. This section includes cash transactions related to the acquisition or disposal of long-term assets, such as property, plant, equipment, and investments.

Step 4: Move to cash flows from financing activities. This section captures cash flows related to borrowing, repaying debt, issuing equity, or paying dividends.

Step 5: Reconcile the net increase or decrease in cash. Add the net cash flows from operating, investing, and financing activities to the beginning cash balance to ensure it matches the ending cash balance on the balance sheet.