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.

---

Definitions:

Convertible Bonds

Convertible bonds are fixed-income securities that the holder can convert into a specified number of shares of the issuing company, usually at a pre-determined time.

Basic EPS

A measure of a company's profitability, calculated as net income divided by the number of outstanding shares of common stock; stands for Basic Earnings Per Share.

Diluted EPS

Earnings per share calculated using the potential conversion of dilutive securities, showing the possible decrease in earnings per share if these were converted.

Convertible Bonds

Bonds that can be converted into a predetermined number of shares of the issuing company's stock at certain times during their life, usually at the discretion of the bondholder.