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 best describes why a company issues stocks?

To record cash inflows from operating activities

To increase cash flows from investing activities

To reduce its liabilities by paying off debts

To raise capital by selling ownership shares to investors

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Verified step by step guidance

Understand the concept of issuing stocks: Companies issue stocks to raise capital by selling ownership shares to investors. This provides the company with funds to finance operations, invest in growth, or pay off debts.

Clarify the purpose of issuing stocks: Issuing stocks is not directly related to recording cash inflows from operating activities, as these inflows come from the company's core business operations.

Distinguish between investing activities and issuing stocks: Cash flows from investing activities typically involve the purchase or sale of long-term assets, not the issuance of stocks.

Explain why issuing stocks does not directly reduce liabilities: While the funds raised can be used to pay off debts, the act of issuing stocks itself is not a mechanism to reduce liabilities.

Conclude that the correct reason for issuing stocks is to raise capital by selling ownership shares to investors, enabling the company to fund its activities and growth.