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 section of the statement of cash flows would most likely provide information needed for CVP (Cost-Volume-Profit) analysis calculations?

Investing activities

Financing activities

Operating activities

Supplemental disclosures

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Verified step by step guidance

Understand the purpose of CVP (Cost-Volume-Profit) analysis: CVP analysis focuses on understanding how costs, sales volume, and profit interact. It requires data related to revenues, expenses, and operational cash flows.

Review the sections of the statement of cash flows: The statement of cash flows is divided into three main sections—Operating activities, Investing activities, and Financing activities. Supplemental disclosures provide additional information but are not part of the main sections.

Identify the section relevant to CVP analysis: Operating activities include cash flows related to the core business operations, such as cash received from customers and cash paid for operating expenses. These are directly tied to the revenues and costs needed for CVP analysis.

Understand why other sections are less relevant: Investing activities focus on cash flows from the purchase or sale of long-term assets, and Financing activities deal with cash flows from borrowing, repaying debt, or issuing equity. These sections do not provide the operational data required for CVP analysis.

Conclude that the Operating activities section is the most relevant for CVP analysis calculations, as it provides the necessary information about cash flows from the company's primary business operations.