Which of the following could describe the effects of a claims exchange transaction on a company's financial statements?
A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question

Which of the following could describe the effects of a claims exchange transaction on a company's financial statements? 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D

Quizplus · Accepted Answer

A claims exchange transaction involves exchanging one claim for another. It does not involve any cash inflow or outflow, and therefore, it will not have an impact on the company's financial statements. In other words, there will be no change in the company's assets, liabilities, equity, revenues, or expenses. Therefore, choice C, which says that there will be no effect on the financial statements, is the correct answer.

Which of the Following Could Describe the Effects of a Claims