In the preparation of a statement of cash flows, all of the following would be classified as financing activities except:
A) the conversion of the company's own preferred stock into common stock.
B) the declaration and payment of a cash dividend on the company's own common stock.
C) the repayment of principal on a mortgage.
D) the sale of the company's own preferred stock for cash.

Question

Quizplus · Accepted Answer

The conversion of preferred stock into common stock is a non-cash financing activity and does not involve cash flow, thus it is not classified under financing activities in the cash flow statement.

In the Preparation of a Statement of Cash Flows, All