Table of contents

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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

Operating Activities: Indirect Method

Financial Accounting

13. Statement of Cash Flows

Operating Activities: Indirect Method

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Multiple Choice

In the statement of cash flows prepared using the indirect method, the section for reporting the purchase of equipment for cash is:

Investing activities

Supplemental disclosures

Financing activities

Operating activities

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Verified step by step guidance

Understand the structure of the statement of cash flows, which is divided into three main sections: Operating activities, Investing activities, and Financing activities.

Recognize that the indirect method starts with net income and adjusts for non-cash transactions and changes in working capital in the Operating activities section.

Identify that cash flows related to the purchase or sale of long-term assets, such as equipment, are categorized under Investing activities.

Note that the purchase of equipment for cash represents an outflow of cash and is reported in the Investing activities section.

Supplemental disclosures are used to provide additional information about non-cash transactions or other relevant details, but they are not part of the main sections of the cash flow statement.