If $350,000 of Bonds Are Issued During the Year, but $150,000

question 122

Multiple Choice

If $350,000 of bonds are issued during the year, but $150,000 of old bonds are retired during the year, the statement of cash flows will show a(n) :

• A) net gain on retirement of bonds of $200,000.
• B) increase in cash of $350,000 and a decrease in cash of $150,000.
• C) net increase in cash of $200,000.
• D) net decrease in cash of $200,000.

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Definitions:

Transactional Approach

An accounting method focusing on the individual transactions and events that have a financial impact on a company, analyzing each separately.

Net Income

The total earnings or profit of a company after subtracting all expenses, taxes, and costs, indicative of the company's financial health over a specific time period.

Income Statement

A financial statement showing a company's revenues, expenses, and profits over a specific period, indicating financial performance.

Financial Statement

Documents that present the financial activities and conditions of a business or entity, including the balance sheet, income statement, and cash flow statement.