An asset (land) was purchased and payment in full was made by issuing the company's common shares.No cash was paid.Therefore,this transaction should be reported on the Statement of Cash Flows:
A)as an "Adjustment to reconcile net income to operating activities."
B)should not be reported on the Statement of Cash Flows but details explained in the disclosure notes.
C)as an outflow of cash.
D)As a non-cash exchange.

Question

Quizplus · Accepted Answer

This transaction does not involve cash and should not be reported on the Statement of Cash Flows. Instead, it should be disclosed in the notes to the financial statements as a non-cash investing and financing activity.

An Asset (Land) Was Purchased and Payment in Full Was