The Issuance of Common Stock in Exchange for a Patent

question 22

Multiple Choice

The issuance of common stock in exchange for a patent would be reported in the following section of the statement of cash flows:

• A)investing activities
• B)operating activities
• C)financing activities
• D)noncash investing and financing activities

---

Definitions:

Prohibited

Actions or activities that are not permitted or allowed by law, regulation, or policy.

Basic Earnings

Earnings calculated by dividing the net income by the total number of outstanding shares, showing the profit earned per share.

Price/Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, commonly used by investors to determine stock attractiveness.

Noncumulative Preferred Stock

A type of preferred stock where dividends do not accumulate if they are not declared or paid in any given year, contrasting with cumulative preferred stock.