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 classified as a cash inflow from investing activities on the statement of cash flows?

Cash received from issuing common stock

Cash collected from customers

Interest received on investments

Proceeds from the sale of equipment

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Verified step by step guidance

Understand the classification of cash flows: The statement of cash flows categorizes cash flows into three main activities: operating, investing, and financing. Investing activities typically involve transactions related to the acquisition or disposal of long-term assets.

Identify the nature of each option: Analyze each option provided in the problem to determine its classification. For example, 'Cash received from issuing common stock' is a financing activity, 'Cash collected from customers' is an operating activity, and 'Interest received on investments' is generally considered an operating activity.

Focus on investing activities: Investing activities include cash inflows and outflows related to the purchase or sale of property, plant, equipment, and investments. Proceeds from the sale of equipment fall under this category because they represent cash inflows from the disposal of a long-term asset.

Eliminate incorrect options: Based on the definitions, eliminate options that do not pertain to investing activities. This ensures that the correct classification is identified.

Conclude with the correct classification: Recognize that 'Proceeds from the sale of equipment' is the correct answer because it is a cash inflow from an investing activity, as it involves the disposal of a long-term asset.