In Preparing a Statement of Cash Flows a Conversion of Bonds

question 34

Multiple Choice

In preparing a statement of cash flows a conversion of bonds into common stock will be reported in

• A) the financing section.
• B) the "extraordinary" section.
• C) a separate schedule or note to the financial statements.
• D) the stockholders' equity section.

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Definitions:

Cash Increase

A rise in the amount of cash and cash equivalents held by a business.

Accounts Payable

Liabilities of a business representing money owed to creditors for goods and services purchased on credit.

Source of Cash

Any activity or operation that brings money into a business, contributing to its cash flow.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.