In Preparing a Statement of Cash Flows, a Conversion of Bonds

question 77

Multiple Choice

In preparing a statement of cash flows, a conversion of bonds into ordinary shares will be reported in

• A) the financing section.
• B) the operating section.
• C) a separate note or supplementary schedule to the financial statements.
• D) the equity section.

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Definitions:

Forward Contract

A personalized agreement where two parties agree to buy or sell an asset at an agreed-upon price at a later date.

Derivative Instrument

A derivative instrument is a financial contract whose value is dependent on the performance of underlying assets, indexes, or rates.

Hedged Item

An asset, liability, firm commitment, or highly probable forecast transaction identified by an entity to manage risks through a hedging relationship.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.