When using the indirect method to determine operating cash flows, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?
A)operating activity
B)investing activity
C)financing activity
D)noncash investing or financing activity
E)not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

Issuing stock to retire a long-term debt is considered a noncash investing or financing activity. These types of transactions are disclosed in a separate schedule or note to the financial statements rather than within the main body of the statement of cash flows.

When Using the Indirect Method to Determine Operating Cash Flows