A Company Loaned $1,000,0000 with Interest at 7% to Another

question 60

Multiple Choice

A company loaned $1,000,0000 with interest at 7% to another company. The interest revenue from this loan would be reported on the statement of cash flows as

• A) cash inflows from operating activities.
• B) cash inflows from investing activities.
• C) cash inflows from financing activities.
• D) noncash transaction in a supplemental disclosure.

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Definitions:

Registration Statement

A set of documents, including a prospectus, filed with the Securities and Exchange Commission for a company intending to issue new securities to the public.

Waiting Period

A designated time span that must pass before the coverage of an insurance policy begins or before a specific action is permitted.

Tombstone Advertisement

A simple and straightforward advertisement typically used in the finance sector to announce a public offering.

Waiting Period

A designated period of time one must wait before a certain action can be taken or a particular benefit becomes effective.