Significant noncash transactions would not include
A)conversion of preferred shares into common shares.
B)asset acquisition through issue of a note payable.
C)loans to other companies.
D)exchange of equipment.

Question

Quizplus · Accepted Answer

Significant noncash transactions typically involve transactions that do not directly involve cash flows but significantly affect the financial position of a company. Examples include the conversion of preferred shares into common shares (A), asset acquisition through the issuance of a note payable (B), and the exchange of equipment (D). These are all examples of significant noncash investing and financing activities that are disclosed in financial statements. However, loans to other companies (C) involve a cash outflow from the lender and a cash inflow to the borrower, making it a cash transaction rather than a noncash transaction.

Significant Noncash Transactions Would Not Include