Question

Which of the following is reported as a financing activity in the statement of cash flows? Multiple Choice The exchange of common stock for a building. The amortization of a patent. The acquisition of long-term investments. The repayment of bonds issued at face value.

Answer 1

Answer:

The correct answer is letter "D": The repayment of bonds issued at face value.

Explanation:

The Cash Flow Statement of financing activities reports all the inflows and outflows of money as a result of investments of the company. If the balance of this statement is positive it means the firm is generating good results. The purchase or sale of securities or the acquisitions of tangible assets, such as properties and equipment, are considered under this category.

The payment of bonds that were sold and issued at face value is registered in the Cash Flow Statement of financing activities as well.