Question

Knowledge Check 01 Transactions that result in significant investing and financing activities but that do not involve cash are reported either directly after the statement of cash flows or in a note to the financial statements. Group startsTrue or False

Answer 1

It is TRUE that the significant non-cash investing and financing activities transactions, which cannot be reported in the statement of cash flows, are reported after the statement or in a separate note to the financial statements.

Some of the significant non-cash investing and financing activities include the issuance of stock for long-term assets or debt retirement and purchasing long-term assets with long-term notes payable.

Thus, these significant non-cash investing and financing activities cannot be reported in the statement of cash flows but require separate disclosure.

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