- CFA Exams
- CFA Exam: Level I 2021
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 28. Non-current (Long-term) Liabilities
- Subject 5. Presentation and Disclosure of Long-Term Debt
CFA Practice Question
On a statement of cash flows, bonds issued at a premium would be shown as follows:
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.
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. |