Which of the following statements about the statement is correct?
A)The sale of an investment in bonds for less than the carrying value of the investment would be reported as cash outflow from financing activities.
B)The sale and issuance of common shares for cash would be reported as a cash inflow from financing activities.
C)The retirement of bonds payable by the issuance of common shares would be reported as a cash inflow from investing activities.
D)Collecting cash interest revenue on a note receivable would be reported as a cash inflow from investing activities.

Question

Quizplus · Accepted Answer

The sale and issuance of common shares for cash is a financing activity, as it involves raising funds through the issuance of equity. Option A is incorrect as the sale of an investment in bonds would be reported as a cash inflow/outflow from investing activities. Option C is incorrect as the retirement of bonds payable by the issuance of common shares would also be reported as a financing activity. Option D is incorrect as collecting cash interest revenue on a note receivable would be reported as a cash inflow from operating activities.

Which of the Following Statements About the Statement Is Correct