ABC Company issued 30,000 shares of common stock in January.In August,the company repurchased 5,000 shares for the treasury.When reporting these transactions in the statement of cash flows,ABC Company ________ combine them into one transaction in the ________ activities section.
A)can;financing
B)cannot;financing
C)cannot;investing
D)can;investing

Question

Quizplus · Accepted Answer

Cash flows from financing activities include exchanges of cash with stockholders (such as the issuance of common stock and repurchase of treasury stock)and cash exchanges with lenders (for principal on loans).Unlike the analysis of operating activities,where we are concerned only with the net change in selected balance sheet accounts,an analysis of financing activities requires that we identify and separately report the causes of both increases and decreases in account balances.

ABC Company Issued 30,000 Shares of Common Stock in January