- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 1. Linkages Between the Financial Statements
CFA Practice Question
Which of the following would not be reported on a statement of cash flows?
B. Bonds were issued at price less than their par or stated value.
C. Cash dividends were declared.
D. Land was purchased by paying $10,000 down and issuing a mortgage note.
E. Equipment that had no book value was sold for $1,000.
A. Common stock was sold at a price in excess of its par value.
B. Bonds were issued at price less than their par or stated value.
C. Cash dividends were declared.
D. Land was purchased by paying $10,000 down and issuing a mortgage note.
E. Equipment that had no book value was sold for $1,000.
Correct Answer: C
User Contributed Comments 9
| User | Comment |
|---|---|
| Rajain | ?? could somebody explain why is the answer C. Rather it should be B. |
| Gina | the dividend was only declared [not paid out yet], ie the record would be debit to Retained Earnings, credit to Dividends Payable. Hence there is no cash transaction involved. as for B: when you issue bonds a cash transaction happens (you issue them to borrow money): debit to cash, credit to bonds payable. B simply says that they were issued at a discount. |
| Bibhu | The trick here is the difference between the word declared and issued. Issued means transactions executed. Declared means its not done and there is no cash flow as such. |
| coolnan | Thanx Gina and Bibhu |
| mirfanrana | issued means transaction executed and declared means its not done yet |
| johntan1979 | Declare: all talk no action |
| ldfrench | ^Kinda like my last girlfriend :( |
| farhan92 | damn! ^ |
| ascruggs92 | ^^well played |