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

The purposes of the statement of cash flows are to:

Report the financial position of a company at a specific point in time.

Summarize changes in shareholders' equity during a period.

Show the profitability of a company over a period of time.

Provide information about a company's cash receipts and cash payments during a period.

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Verified step by step guidance

Understand the purpose of the statement of cash flows: It is designed to provide information about a company's cash inflows (receipts) and outflows (payments) during a specific period.

Recognize that the statement of cash flows is distinct from other financial statements, such as the balance sheet (which reports financial position at a specific point in time) and the income statement (which shows profitability over a period).

Identify the three main sections of the statement of cash flows: operating activities, investing activities, and financing activities. Each section categorizes cash flows based on their source or use.

Note that the statement of cash flows helps stakeholders understand how a company generates and uses cash, which is critical for assessing liquidity, solvency, and financial flexibility.

Conclude that the primary purpose of the statement of cash flows is to provide detailed information about cash transactions, rather than summarizing equity changes or profitability.