Which of the following describes the effects of a claims exchange transaction on a company's financial statements?

A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following describes the effects of a claims exchange transaction on a company's financial statements?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

A claims exchange transaction will result in either an increase in liabilities and a decrease in equity or a decrease in liabilities and an increase in equity.It may or may not affect the income statement,but it will never affect the statement of cash flows,as it does not affect any asset,including cash.

Which of the Following Describes the Effects of a Claims