Canada Company Needs to Purchase a Property to Build Their

question 160

Multiple Choice

Canada Company needs to purchase a property to build their headquarters.An investor is willing to exchange land with a market value of $700,000 for shares of common stock.On the statement of cash flows,this transaction would be shown as ________.

• A) investing activities
• B) non-cash investing and financing activities
• C) operating activities
• D) financing activities

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Definitions:

Current GAAP

Generally Accepted Accounting Principles as they are presently defined and practiced in the United States for financial reporting.

Direct Method

A way of reporting cash flows from operating activities by showing major classes of gross cash receipts and payments.

Operating Activities

Operating activities involve the primary day-to-day functions of a business related to producing and selling its goods or services.

Statement of Cash Flows

A financial statement that provides a detailed analysis of what happened to a company's cash during a period, categorizing cash flows into operating, investing, and financing activities.