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

When analyzing historical revenue in the context of the statement of cash flows, which question are you most likely to ask?

How much of the reported revenue was actually collected in cash during the period?

How were the company’s liabilities affected by depreciation expense?

What is the total amount of assets owned by the company?

What is the company’s net income for the period?

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Verified step by step guidance

Step 1: Understand the context of the statement of cash flows. The statement of cash flows focuses on cash inflows and outflows during a specific period, providing insights into the company's liquidity and cash management.

Step 2: Recognize that historical revenue is reported on the income statement, which uses accrual accounting. This means revenue is recorded when earned, not necessarily when cash is received.

Step 3: Identify the key question related to cash flows and revenue. Since the statement of cash flows deals with actual cash transactions, the relevant question would be about how much of the reported revenue was collected in cash during the period.

Step 4: Eliminate irrelevant options. Questions about liabilities affected by depreciation, total assets owned, or net income are not directly related to the cash flow analysis of revenue.

Step 5: Conclude that the most relevant question for analyzing historical revenue in the context of the statement of cash flows is: 'How much of the reported revenue was actually collected in cash during the period?'