Which of the Following Statements About the Statement Is Correct

question 72

Multiple Choice

Which of the following statements about the statement is correct?

• A)The sale of an investment in bonds for less than the carrying value of the investment would be reported as cash outflow from financing activities.
• B)The sale and issuance of common shares for cash would be reported as a cash inflow from financing activities.
• C)The retirement of bonds payable by the issuance of common shares would be reported as a cash inflow from investing activities.
• D)Collecting cash interest revenue on a note receivable would be reported as a cash inflow from investing activities.

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Definitions:

Current-Rate Method

A method used in translating the financial statements of foreign subsidiaries, where all assets and liabilities are translated at the current exchange rate.

Retained Earnings

The portion of a company's profit that is held or retained and not paid out as dividends to shareholders, often used for investment in the business, debt reduction, or to shore up the balance sheet.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or a decline in value.

Current-Rate Method

A method of foreign currency translation where all financial statements are converted at the current exchange rate at the time of reporting, affecting balance sheet and income statement items.