CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

On a statement of cash flows, bonds issued at a premium would be shown as follows:

A. The entire proceeds would be shown in the operating section as an addition.
B. The entire proceeds would be shown in the investing section as an addition.
C. The entire proceeds would be shown in the financing section as an addition.
Correct Answer: C

All of the proceeds would be shown in the financing section as an addition, an increase in cash flows.

User Contributed Comments 2

User Comment
cfairs For any given bond:

Entire proceeds would be shown in CFF at issuance and at maturity. In subsequent periods, CFF will not have entries.

However, CFO will have entries from bond issuance to maturity. Interest based on coupon rate.
shovde Where does amortization of a premium show up though? I thought that was in CFF.
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