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

In the statement of cash flows, the section used to report the issuance of common stock for cash is:

Operating activities

Supplemental disclosures

Financing activities

Investing activities

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Understand the purpose of the statement of cash flows: It categorizes cash inflows and outflows into three main sections—Operating activities, Investing activities, and Financing activities.

Recognize that issuing common stock for cash involves raising funds from shareholders, which is a financing activity. Financing activities include transactions related to equity and debt financing.

Differentiate between the sections: Operating activities involve day-to-day business operations, Investing activities involve the purchase or sale of long-term assets, and Financing activities involve transactions with owners and creditors.

Note that supplemental disclosures are not a section of the statement of cash flows but rather additional information provided to explain certain cash flow items.

Conclude that the issuance of common stock for cash is reported under the Financing activities section because it represents a transaction that affects the company's equity financing.