Noncash investing and financing transactions, such as the exchange of common stock to purchase assets, represent significant investing and financing activities and are disclosed in a supplementary schedule that is attached to the statement of cash flows.

Question

Quizplus · Accepted Answer

This statement is true. Noncash investing and financing transactions are disclosed in a supplementary schedule attached to the statement of cash flows. Examples of noncash investing and financing activities include the exchange of common stock for assets, the conversion of debt to equity, and the issuance of bonds to retire long-term debt. These activities are important to disclose because they can significantly affect a company's financial position and cash flows, even though no actual cash has been exchanged.

Noncash Investing and Financing Transactions, Such as the Exchange of Common