CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following would not be reported on a statement of cash flows?

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
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