CAF-1 · Chapter 14 · Question 5 of 15
Which of the following represents a non-cash transaction that must be EXCLUDED from the statement of cash flows?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The conversion of debt to equity.
Explanation
Investing and financing transactions that do not require the use of cash (like a debt-to-equity conversion or bonus share issue) are excluded from the cash flow statement but disclosed in the notes.
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