The conversion of nonparticipating preferred stock into common stock should be presented in a statement of cash flows as a(n)
A) operating activity.
B) investing activity.
C) financing activity.
D) noncash exchange.

Question

Quizplus · Accepted Answer

The conversion of nonparticipating preferred stock into common stock is considered a noncash exchange and should be disclosed in the statement of cash flows as a noncash investing and financing activity, not as an operating, investing, or financing activity that affects cash flow.

The Conversion of Nonparticipating Preferred Stock into Common Stock Should