Which of the following statements is true about the consolidated statement of cash flows?
A) The purchase of intercompany bonds from parties outside the consolidated group is treated as a retirement of consolidated debt; the payment is reported as a cash outflow from financing activities.
B) The purchase of intercompany bonds from parties outside the consolidated group is treated as a retirement of consolidated debt; the payment is reported as a cash outflow from investing activities.
C) Intercompany interest payments and amortization of premiums and/or discounts on intercompany bonds are reported in the operating activities section of the statement.
D) Intercompany interest payments and amortization of premiums and/or discounts on intercompany bonds are reported in the investing activities section of the statement.
Correct Answer:
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