When using the indirect method to determine operating cash flows, how is the issuing of stock for cash shown on the Statement of Cash Flows?
A)operating activity
B)investing activity
C)financing activity
D)non cash investing and financing activity
E)not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

Issuing stock for cash falls under financing activity since it involves raising capital for the company through the sale of ownership in the company. This activity is not directly related to the operating or investing activities of the company.

When Using the Indirect Method to Determine Operating Cash Flows