Which transaction would not appear in the body of a cash flow statement?
A) purchase of a building by incurring a mortgage to the seller
B) acquisition of assets by means of a share issue
C) conversion of a liability to equity
D) all of the above

Question

Quizplus · Accepted Answer

All of the transactions would not appear in the body of a cash flow statement because they do not involve the inflow or outflow of cash. The purchase of a building by incurring a mortgage to the seller involves obtaining a loan, which is a financing activity. Acquisition of assets by means of a share issue involves issuing shares to raise funds, which is a financing activity. Conversion of a liability to equity, such as converting debt to equity, does not involve any cash flows, but represents a change in the ownership structure of a company.

Which Transaction Would Not Appear in the Body of a Cash