A company acquired land by issuing its common stock. How should this transaction be disclosed when a statement of cash flows is prepared?
A)In a supplemental schedule of noncash investing and financing activities or in a note.
B)The acquisition of land should be reported as an investing activity and the issuance of the stock as a financing activity.
C)In a separate section of the statement of cash flows.
D)The transaction does not need to be disclosed.

Question

Quizplus · Accepted Answer

Transactions that do not involve cash, such as acquiring land through the issuance of stock, are not reported in the main body of the statement of cash flows. Instead, they are disclosed in a supplemental schedule of noncash investing and financing activities or in a note to the financial statements.

A Company Acquired Land by Issuing Its Common Stock