An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?
A)The retirement of debt by issuing equity stock.
B)A transaction exchanging cash equivalents for cash.
C)The leasing of assets in a long-term lease transaction.
D)The purchase of noncash assets in exchange for equity or debt securities.
E)The purchase of long-term assets financed by issuing a note or bond.

Question

Quizplus · Accepted Answer

Option B involves the exchange of cash equivalents for cash, which does not involve noncash investing or financing activities. All other options involve transactions where noncash assets are exchanged for equity/debt securities, or long-term leases are entered into, or debt is retired through equity stock issuance, or long-term assets are purchased through issuance of notes or bonds. These transactions require disclosure as noncash investing and financing activities in the financial statements.

An Example of a Transaction That Must Be Disclosed as a Noncash