Some investing and financing activities involve no cash flows so they
A) represent no significant financial change.
B) should be included in the three main sections of the statement of cash flows.
C) should be reported in a separate section of the statement of cash flows.
D) must be converted to cash at the end of the accounting period.

Question

Quizplus · Accepted Answer

Investing and financing activities that involve no cash flows should be reported in a separate section of the statement of cash flows called "noncash investing and financing activities." This section is required by generally accepted accounting principles (GAAP) to provide additional information to users of the financial statements. While these activities may not involve the exchange of cash, they can still have a significant impact on a company's financial position and performance. Therefore, they should be disclosed separately to ensure transparency and clarity in financial reporting.

Some Investing and Financing Activities Involve No Cash Flows So