The retirement of debt by the issuance of common stock should be presented in a statement of cash flows in which of the following sections?
A)
Supplemental schedule of noncash investing and financing activities
B)Cash flows from operating activities
C)Cash flows from investing activities
D)Cash flows from financing activities
E)Supplemental schedule to reconcile net income to net cash provided by operations

Question

Quizplus · Accepted Answer

The retirement of debt by issuing common stock is a noncash transaction that does not affect the cash flows directly. Therefore, it should be reported in the supplemental schedule of noncash investing and financing activities, not in the main body of the cash flow statement.

The Retirement of Debt by the Issuance of Common Stock