Transnational Company just started in business and was looking for additional capital in order to purchase a property to build their headquarters. They found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company. This transaction would be shown in the investing activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

The transaction described would actually be shown in the financing activities section of the statement of cash flows, as it involves the issuance of stock in exchange for land. Investing activities typically involve the purchase and sale of long-term assets, such as property, plant, and equipment, or investments in other companies.

Transnational Company Just Started in Business and Was Looking for Additional