When using the direct method, how is the issuance of stock for cash shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Question

Quizplus · Accepted Answer

Issuance of stock for cash is a financing activity as it involves obtaining funds from investors in exchange for ownership in the company. Therefore, it is shown on the statement of cash flows under financing activities.

When Using the Direct Method, How Is the Issuance of Stock