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 would be included in cash flows from investing activities on the statement of cash flows?

Purchase of equipment

Issuance of common stock

Payment of salaries to employees

Payment of dividends

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Verified step by step guidance

Understand the classification of cash flows: The statement of cash flows is divided into three main categories: operating activities, investing activities, and financing activities. Investing activities typically involve transactions related to the acquisition or disposal of long-term assets and investments.

Analyze the options provided: Review each option to determine whether it falls under investing activities. Investing activities include transactions such as the purchase or sale of equipment, property, or investments.

Evaluate 'Purchase of equipment': Purchasing equipment is considered an investing activity because it involves acquiring a long-term asset that will be used in the business operations.

Evaluate 'Issuance of common stock': Issuing common stock is a financing activity because it involves raising capital from shareholders, not the acquisition or disposal of long-term assets.

Evaluate 'Payment of salaries to employees' and 'Payment of dividends': Payment of salaries is an operating activity as it relates to day-to-day business operations. Payment of dividends is a financing activity because it involves distributing profits to shareholders.