A parent company purchased all the outstanding bonds of its subsidiary. This cash transaction will appear in which section of the consolidated statement of cash flows? Operating Investing Financing No Adjustment a no yes no no b no no no yes c yes no no no d no no yes no

A parent company purchased all the outstanding bonds of its subsidiary. This cash transaction will appear in which section of the consolidated statement of cash flows? Operating Investing Financing No Adjustment a no yes no no b no no no yes c yes no no no d no no yes no

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A parent company purchased all the outstanding bonds of its subsidiary. This cash transaction will appear in which section of the consolidated statement of cash flows?

	Operating	Investing	Financing	No Adjustment
a	no	yes	no	no
b	no	no	no	yes
c	yes	no	no	no
d	no	no	yes	no

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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