Which of the following transactions would be reported within the financing activities section of the cash flow statement?
A)An issue of preferred stock in exchange for a parcel of land.
B)The accrual of a cash dividend.
C)The cash payment of interest associated with bonds payable.
D)The sale of treasury stock for cash.

Question

Quizplus · Accepted Answer

The sale of treasury stock for cash is a financing activity, as it involves the company raising cash by selling its own stock. A is incorrect because an issue of preferred stock in exchange for a parcel of land is a non-cash transaction and would not be reported in the cash flow statement. B is incorrect because the accrual of a cash dividend does not involve actual cash transactions and would not be reported in the cash flow statement. C is incorrect because the cash payment of interest associated with bonds payable would be reported in the operating activities section of the cash flow statement.

Which of the Following Transactions Would Be Reported Within the Financing