CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Ivex Corporation purchased a building by paying 10% of the purchase price in cash and issuing a mortgage payable to the seller for the balance. Since this transaction involves simultaneous non-cash investing (building) and financing (mortgage payable) activity, it would not appear in the body of the statement of cash flows. True or False?
Correct Answer: False

This transaction would be included in the statement of cash flows.

User Contributed Comments 8

User Comment
examinee It will appear in the footnotes but not in the statement. No?
synner is it because 10% of the purchase price was paid in cash?
katybo that's right
3dmouse If the company just issuea martgage payable for the whole tranaction, it still would not appear in the body of the statment of cash flows?
I am guessing, the answer is false. ( correct me if i am wrong)
because the body of the statement of CF includes footnote that describle any noncash investment.
cong Even if a transaction is recorded in the footnote or supplementary schedule, you can still say the transaction appears on the cash flow statement .
rocyang key word: "in cash"
Kevdharr They paid cash so it's on the statement of cash flows. The remaining balance was bought on credit (accounts payable increased).
dbedford So the portion that was paid in cash will show up on the cash flow statement the rest will show up else where
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