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

In a statement of cash flows, the sum of cash inflows and outflows for a period is equal to:

Total assets at the end of the period

Net income for the period

Total revenues for the period

The net increase or decrease in cash during the period

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Verified step by step guidance

Understand the purpose of the statement of cash flows: It is used to report the cash inflows and outflows during a specific period, categorizing them into operating, investing, and financing activities.

Recognize that the sum of cash inflows and outflows represents the net change in cash during the period. This is the difference between the beginning cash balance and the ending cash balance.

Clarify that the net increase or decrease in cash during the period is not directly related to total assets, net income, or total revenues. These are separate financial metrics reported in other financial statements.

Identify that the statement of cash flows reconciles the beginning cash balance with the ending cash balance by accounting for all cash transactions during the period.

Conclude that the correct answer is 'The net increase or decrease in cash during the period,' as this is the result of summing all cash inflows and outflows reported in the statement of cash flows.