Selling new shares is an equity transaction; it does not affect any asset or liability account and therefore, does not appear on the statement of cash flows.

Question

Quizplus · Accepted Answer

Selling new shares is an equity transaction that affects the cash account, which is an asset. It appears in the financing section of the statement of cash flows as it involves cash inflow from issuing equity.

Selling New Shares Is an Equity Transaction; It Does Not