The Issuance of Common Stock in Exchange for Land and Equipment

question 60

Multiple Choice

The issuance of common stock in exchange for land and equipment will:

• A)affect the financing activities section of the statement of cash flows.
• B)not affect the statement of cash flows.
• C)affect the operating activities section of the statement of cash flows.
• D)affect the investing activities section of the statement of cash flows.

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Definitions:

Collection Delay

The time lag between the date an entity issues an invoice and the date it actually receives payment.

Average Daily Receipts

The average amount of cash generated through sales or services rendered on a daily basis.

Customers

Individuals or businesses that purchase goods or services from a company.

Collection Delay

The time lag between when a payment is made by a buyer and when the funds become available to the seller.