Which of the Following Statements Is Incorrect

question 38

Multiple Choice

Which of the following statements is incorrect?

• A) It is common for companies to both retire debt and issue new bonds in the same year as a way to replace higher interest rate debt with lower interest rate issuances.
• B) The cash payment of interest is reported as a cash flow from operating activities.
• C)Retiring bonds by paying cash creates a cash flow from investing activities when the issuing corporation buys the bonds back from investors.
• D)The cash payment to call an outstanding bond issue is reported as a cash flow from financing activities.

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Definitions:

Goodwill Impairment

A decrease in the value of the goodwill asset when the fair value of a company's goodwill becomes less than its recorded cost on the balance sheet.

Public Order

Laws, regulations, or practices aimed at preserving peace and preventing behaviors that disrupt society's tranquility and safety.

Economic

Relating to the economy, or the comprehensive system involving the production, distribution, and consumption of goods and services.

Selective Understanding

The phenomenon of interpreting information in a way that aligns with pre-existing beliefs or opinions, ignoring conflicting data.