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 is a cash outflow from financing activities on the statement of cash flows?

Repayment of long-term debt

Payment to suppliers for inventory

Receipt of interest income

Purchase of equipment

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Verified step by step guidance

Step 1: Understand the concept of financing activities. Financing activities in the statement of cash flows refer to transactions that involve funding the business through debt, equity, or repayments. These activities typically include issuing stock, borrowing money, repaying loans, or paying dividends.

Step 2: Analyze each option provided in the question to determine whether it qualifies as a financing activity. For example, repayment of long-term debt is directly related to financing activities because it involves paying back borrowed funds.

Step 3: Eliminate options that are not financing activities. Payment to suppliers for inventory is an operating activity, as it relates to the day-to-day operations of the business. Receipt of interest income is also an operating activity, as it pertains to earnings from investments. Purchase of equipment is an investing activity, as it involves acquiring long-term assets.

Step 4: Focus on the option that represents a cash outflow from financing activities. Repayment of long-term debt is a cash outflow because it involves using cash to settle financial obligations.

Step 5: Conclude that the correct answer is 'Repayment of long-term debt,' as it is the only option that fits the definition of a cash outflow from financing activities on the statement of cash flows.