How Would the Issuance of Common Stock Affect the Statement

question 2

Multiple Choice

How would the issuance of Common Stock affect the statement of cash flows financing section-indirect method?

• A) It would affect the financing section positively.
• B) It would affect the financing section negatively.
• C) It would increase the investing section of the statement of cash flows.
• D) Does not affect the cash flow from financing.

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Definitions:

Reconciling Columns

The process of ensuring two sets of figures or account balances agree or match, often used in accounting.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.

Financing Activities

Transactions and events where a company raises capital or repays investors, including issuing shares or borrowing money.

Direct Method

A method for preparing the cash flow statement that lists major classes of gross cash receipts and payments.