An Example of a Financing Activity on the Statement of Cash

question 43

True/False

An example of a financing activity on the statement of cash flows is the conversion of debt to common stock.

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Definitions:

Voting Stock

Shares that give the holder the right to vote on company matters, such as electing the board of directors.

Contingent Payment

A payment that is not guaranteed but depends on the occurrence of a certain event or condition in the future.

Cash Flows

The complete sum of funds moving into and out of an enterprise, predominantly affecting its ability to cover short-term obligations.