Caroline, Inc. exchanged a tract of land it held in Mississippi for a tract of land owned by Rosalie Corporation located in Illinois. How is this transaction reported on Caroline, Inc.'s statement of cash flows?
A) As a cash inflow from investing activities and a cash outflow from financing activities.
B) As a cash inflow and a cash outflow from investing activities.
C) As a cash inflow and a cash outflow from financing activities.
D) This transaction is not reported in the body of the statement of cash flows.

Question

Quizplus · Accepted Answer

Exchanging one tract of land for another does not involve cash transactions; therefore, it is not reported in the body of the statement of cash flows. Non-cash investing and financing activities are disclosed elsewhere in the financial statements.