Financing Activities Quiz

What is included in cash inflows from financing activities?

How are cash dividends reported in financing activities?

What impact does the purchase of treasury stock have on the cash flow statement?

Which of the following describes long-term liabilities in financing activities?

In what context are stock dividends reported in the statement of cash flows?

What was the total cash inflow from issuance related to ShopMart's notes payable?

Which entry reflects the issuance of common stock in ShopMart's cash flows?

What account would be affected by a cash outflow for retiring notes payable?

Financing Activities

Financing activities affect long-term liabilities and equity accounts (e.g., long-term notes payable, bonds payable, common stock, retained earnings)
Cash flows from financing activities are determined by analyzing each account type

Long-Term Liabilities

ShopMart's Notes Payable T-account is used to track cash inflows and outflows
$90,000 cash received from issuing notes payable
$10,000 cash paid to retire notes payable
Notes payable transactions are listed first in the cash flow from financing section

Common Stock and Treasury Stock

Cash flows for financing activities are also analyzed via stock accounts
$120,000 cash received from issuing common stock
$20,000 cash paid for purchasing treasury stock

Statement of Cash Flows Example

ShopMart, Inc. statement of cash flows (partial), Year Ended December 31, 2024
Cash receipt from issuance of notes payable: $90,000
Cash payment of notes payable: ($10,000)
Cash receipt from issuance of common stock: $120,000
Cash payment for purchase of treasury stock: ($20,000)
Net cash provided by financing activities: $170,000
Net change in cash and cash balances: ($20,000
Beginning cash balance (Dec 31, 2023): $42,000
Ending cash balance (Dec 31, 2024): $22,000

Test your understanding of financing activities, including long-term liabilities and equity accounts. This quiz covers cash flow analysis for notes payable, common stock, and treasury stock based on ShopMart's financial activities. Perfect for accounting students looking to enhance their comprehension of cash flow statements.