Use the Following Codes to Indicate How the Cash Flow

question 157

Multiple Choice

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method.
-Issued preferred stock.

• A)Inflow from operating activity
• B)Outflow from operating activity
• C)Inflow from investing activity
• D)Outflow from investing activity
• E)Inflow from financing activity
• F)Outflow from financing activity
• G)Noncash investing and financing activity
• H)Not reported on statement of cash flows

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Definitions:

Tender Offer

An offer to purchase made by one company directly to the shareholders of another (target) company; often referred to as a “takeover bid.”

Target Company's Management

The executive and senior officers responsible for operating and making strategic decisions for a company that is being considered for acquisition or merger.

Merger

The combining of two or more entities into one, through either the acquisition of one by another or the consolidation of both into a new entity.

Building Corporation

A company engaged in the construction of buildings, ranging from residential to commercial projects.