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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following is an example of an investing activity?

Paying salaries to employees

Paying dividends to shareholders

Issuing common stock to raise capital

Purchasing equipment for cash

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Understand the definition of investing activities: Investing activities involve the acquisition or disposal of long-term assets and other investments not included in cash equivalents. These activities are typically related to the purchase or sale of property, plant, equipment, or investments.

Analyze the options provided: Paying salaries to employees is an operating activity because it relates to the day-to-day operations of the business. Paying dividends to shareholders is a financing activity because it involves the distribution of profits to owners. Issuing common stock to raise capital is also a financing activity as it pertains to obtaining funds from investors.

Focus on the correct answer: Purchasing equipment for cash is an investing activity because it involves the acquisition of a long-term asset (equipment) that will be used in the business operations.

Relate the correct answer to the cash flow statement: In the cash flow statement, cash outflows for purchasing equipment are reported under the investing activities section, reflecting the use of cash to acquire long-term assets.

Summarize the reasoning: The key distinction is that investing activities are tied to the acquisition or disposal of long-term assets, which is why purchasing equipment for cash qualifies as an investing activity.