In preparing a cash flow statement, a conversion of bonds into common shares will be reported in
A) the financing section.
B) the investing section.
C) a separate schedule or note to the financial statements.
D) the shareholders' equity section.

Question

Quizplus · Accepted Answer

The conversion of bonds into common shares is a non-cash transaction that does not affect cash flow directly. Therefore, it is typically reported in a separate schedule or note to the financial statements rather than in the main sections of the cash flow statement.

In Preparing a Cash Flow Statement, a Conversion of Bonds