The Reporting of Financing Activities in the Statement of Cash

question 162

True/False

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

Identify and record the initial issuance of stock and related expenses.

Recognize how to account for stock issuance costs.

Differentiate between initial and subsequent issuance of stock regarding recording related expenses.

Understand how costs associated with issuing stock affect financial statements.

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Definitions:

Acceptance To A Contract

The act of agreeing to the terms of a contract, thereby completing the process of its formation.

Additional Terms

Additional clauses or stipulations added to a contract or agreement that are not part of the original proposal or negotiation.

Merchant

A person who is engaged in the purchase and sale of goods. Under the Uniform Commercial Code, a person who deals in goods of the kind involved in the sales contract; for further definitions, see UCC 2–104.

Original Offer

The initial proposal or bid made during negotiations or contractual discussions, from which subsequent offers may be derived.