Concept explainers
Statement of
Non-Cash Transaction:
The transaction, which does not involve any cash dealings, is known as non-cash transactions. In these type transactions there will not be any inflow or outflow of cash. Simply put, the transaction, which does not have an impact on the inflow or outflow of cash, is called as non-cash transactions.
Examples of significant non-cash transactions are stated below:
- Issue of common stock to retire long-term debt.
- Purchase of machinery by issuing notes payable
- Issuance of common stock for purchase of land
To Identify: The non-cash transactions that occurred during the year.
To Report: The non-cash investing and financing transitions..
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Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
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