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 which section of a statement of cash flows would the payment of cash dividends be reported?

Financing activities

Investing activities

Operating activities

Supplemental disclosures

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Understand the purpose of the statement of cash flows: It categorizes cash transactions into three main sections—operating activities, investing activities, and financing activities—to show how cash is generated and used during a period.

Review the definition of financing activities: These include transactions related to borrowing, repaying debt, issuing equity, and distributing dividends to shareholders. Payment of cash dividends falls under this category because it represents a return of capital to shareholders.

Compare financing activities with other sections: Operating activities involve cash flows from the core business operations, such as revenue and expenses. Investing activities involve cash flows from the purchase or sale of long-term assets. Supplemental disclosures provide additional information but are not a primary section.

Identify the correct section: Since the payment of cash dividends is a transaction that affects the company's equity and involves returning funds to shareholders, it is classified under financing activities.

Conclude that the payment of cash dividends is reported in the financing activities section of the statement of cash flows.