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 lists the four steps in preparing a statement of cash flows in the correct order?

1. Determine the net increase or decrease in cash2. Calculate net cash provided or used by operating activities3. Calculate net cash provided or used by investing activities4. Calculate net cash provided or used by financing activities

1. Prepare the income statement2. Prepare the balance sheet3. Prepare the statement of cash flows4. Reconcile net income to net cash from operating activities

1. Determine the net increase or decrease in cash2. Analyze operating activities3. Analyze investing activities4. Analyze financing activities

1. Determine the net increase or decrease in cash2. Analyze changes in noncash accounts3. Prepare separate sections for operating, investing, and financing activities4. Reconcile the net change in cash with the beginning and ending cash balances

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Verified step by step guidance

Step 1: Understand the purpose of the statement of cash flows, which is to summarize the cash inflows and outflows from operating, investing, and financing activities during a specific period.

Step 2: Begin by determining the net increase or decrease in cash. This involves comparing the beginning and ending cash balances from the balance sheet.

Step 3: Analyze changes in noncash accounts, such as accounts receivable, inventory, and accounts payable, to identify adjustments needed for the operating activities section.

Step 4: Prepare separate sections for operating, investing, and financing activities. Operating activities include cash flows from day-to-day business operations, investing activities include cash flows from buying or selling assets, and financing activities include cash flows from borrowing or repaying debt or issuing equity.

Step 5: Reconcile the net change in cash with the beginning and ending cash balances to ensure the statement of cash flows is accurate and complete.