LVL 1 SAMPLE EXAM3 QUESTION 30 investing, financing, activities, understand

essencnz

A company issued shares to acquire a large tract of undeveloped land for future development. The correct recording of this transaction in the cash flow statement is as a(n):

 

a. disclosure in a note or supplementary schedule.

b. outflow in investing activities, and an inflow in financing activities.

c. outflow in operating activities, and an inflow in financing activities.

 

the answer is a.

 

but I dont understand... issue shares is CFF inflow, and purchase land is CFI outflow....I think the answer is B.

 

is there anybody can tell me the reason to choose A?

 

thanks

darkqueen

I also chose B

but after looking at the answer, I think that the meaning of this question may be that the company exchanged their shares for the undeveloped land, so it is a non-cash event~~

 

anyone please tell me whether my consider is right~~

zooy

对的，CFA可能认为这是一笔非现金交易，需要在footnotes里面披露出来

yapee

just remember it

faye626

就是用股票换土地啊,物品换物品

pingguohjy

这个是non－cash transaction，不计入cash flow

testppmm

 B
non－cash transaction