If $200,000 of New Bonds Are Issued During the Year

question 75

Multiple Choice

If $200,000 of new bonds are issued during the year and $120,000 of old bonds are retired during the year, the financing activities section of the statement of cash flows will show

• A)a net increase in cash of $80,000.
• B)a net decrease in cash of $80,000.
• C)an increase in cash of $200,000 and a decrease in cash of $120,000.
• D)a net gain on retirement of bonds of $80,000.

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Definitions:

Sales Account

An account in a company's financial records that tracks the revenue generated from goods and services sold.

Sales Discount

A reduction in the price of goods or services offered to customers, usually to encourage prompt payment.

Perpetual Inventory System

This technique documents transactions of inventory sales or purchases in real-time, utilizing computer-based point-of-sale systems and software designed for managing company assets.

Physical Inventory

The process of counting the actual items of inventory in stock to verify records and accounts.