Significant noncash financing and investing activities:
A)must be reported in the notes to the financial statements.
B)are not separately disclosed within the financial statements.
C)are disclosed in a separate schedule as a supplement to the statement of cash flows.
D)are reported as cash flows because of their significance.

Question

Quizplus · Accepted Answer

Significant noncash financing and investing activities are not reported as cash flows in the statement of cash flows. Instead, they are disclosed in a separate schedule as a supplement to the statement of cash flows. This schedule provides additional information about the transactions that affected the company's financing and investing activities, but did not result in cash receipts or payments. Examples of significant noncash transactions include the issuance of bonds or stock, the acquisition of assets through issuance of debt or equity securities, and the exchange of noncash assets or liabilities. The purpose of this disclosure is to provide users of the financial statements with a clearer understanding of the company's financing and investing activities, and how these activities impact the company's financial position and cash flows.

Significant Noncash Financing and Investing Activities