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 NOT involved in the preparation of the statement of cash flows?

Identifying cash inflows and outflows from operating, investing, and financing activities

Classifying cash transactions according to their nature

Adjusting net income for non-cash expenses and changes in working capital

Calculating depreciation expense for the income statement

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Verified step by step guidance

Step 1: Understand the purpose of the statement of cash flows. It is a financial statement that provides information about cash inflows and outflows categorized into operating, investing, and financing activities.

Step 2: Recognize the key processes involved in preparing the statement of cash flows. These include identifying cash transactions, classifying them according to their nature, and adjusting net income for non-cash expenses and changes in working capital.

Step 3: Note that depreciation expense is a non-cash item. While it is adjusted in the preparation of the statement of cash flows, calculating depreciation expense itself is part of preparing the income statement, not the statement of cash flows.

Step 4: Distinguish between the tasks specific to the statement of cash flows and those related to other financial statements. Calculating depreciation expense is not directly involved in the preparation of the statement of cash flows.

Step 5: Conclude that the correct answer is 'Calculating depreciation expense for the income statement,' as it is not part of the preparation process for the statement of cash flows.