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 result in a cash inflow from investing activities on the statement of cash flows?

Issuance of common stock

Sale of equipment for cash

Purchase of inventory

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 sections—operating activities, investing activities, and financing activities. Investing activities typically involve transactions related to the acquisition or disposal of long-term assets.

Identify the nature of each option: Analyze each option to determine whether it relates to investing activities. For example, the sale of equipment for cash involves the disposal of a long-term asset, which is classified under investing activities.

Exclude non-investing activities: Issuance of common stock is a financing activity, purchase of inventory is an operating activity, and payment of dividends is also a financing activity. These do not fall under investing activities.

Focus on the correct option: The sale of equipment for cash is a cash inflow because it generates cash from the disposal of a long-term asset, which is directly related to investing activities.

Conclude the classification: Confirm that the sale of equipment for cash is the only option that results in a cash inflow from investing activities on the statement of cash flows.