 Hello, in this lecture, we will define financing activities. According to fundamental accounting principles, while the 22nd edition, the definition of financing activities is transactions with owners and creditors that include obtaining cash from issuing debt, repaying amounts borrowed and obtaining cash from or distributing cash to owners. Support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. We're considering financing activities in this case in the context of a statement of cash flows, a statement of cash flows having three parts of those parts being cash flows from operating activities, cash flows from investing activities, cash flows from financing activities. This is going to be an example of a worksheet of a statement of cash flows. We are focusing here on the cash flows from financing activities. When we think about the statement of cash flows, we often concentrate up here on the cash flows from operating activities, because that's going to be the largest part and it's going to be the operating parts, which means it's going to be basically the income statement converted from an accrual basis to an income statement kind of on a cash basis, depending on the method we use. A direct method would be more of a direct conversion. The method often used is an indirect method, the one being shown here, which basically takes net income and converts it from an accrual basis to a cash basis on the operating activities. The investing activities and the financing activities will be the same whether we use a direct or indirect method. The financing activities have to do with what we might expect would be in our financing activities. It includes things like related to loans, if we needed to get a loan, if we took out a loan, or if we repaid a loan, those activities would be in the financing activities. We would know they would not be up here in the investing activities because those journal entries typically don't have anything to do with the income statement when we record them, although they do have something to do with cash, therefore they need to be on the cash flow statement somewhere. We could have issued stock, so basically we have new owners that are investing directly into the company by the issuance of stock. That would be an activity that would be down here in the financing. We could also be repaying the owners in the form of dividends and that would be cash going out, another thing that would be recorded in the financing activities section of the statement of cash flows.