The conversion of nonparticipating preferred stock into common stock should be presented in a statement of cash flows as a(n)
A)operating activity.
B)investing activity.
C)financing activity.
D)noncash exchange.
E)None of these answers is correct.

Question

Quizplus · Accepted Answer

The conversion of nonparticipating preferred stock into common stock is considered a noncash exchange and should be disclosed in the statement of cash flows in a separate section for noncash investing and financing activities, rather than as an operating, investing, or financing activity.

The Conversion of Nonparticipating Preferred Stock into Common Stock Should