Which of the following is a non-cash investing and financing activity?

Payment of a cash dividend

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Payment of a six-month note payable

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Purchase of merchandise inventory on account

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Issuance of common stock to acquire land

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Solution

The correct option is D Issuance of common stock to acquire land
As per AS-3, investing and financing transactions that do not require the use of cash or cash equivalents should be excluded from a cash flow statements. Such transactions should be disclosed elsewhere in the financial statements in a way that provide all the relevant information about these investing and financing activities. Example of such transaction are acquisition of land by issue of equity shares or redemption of debenture by issue of equity shares.

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Similar questions

Q. Which of the following would not be considered a non-cash investing and financing activity in preparing a statement of cash flows?

Q. The last item on statement of cash flows prior to the schedule of non-cash investing and financing activities reports _________________.

Q. Non cash investing and financing activities which may have significant effect on future cash flow are reported ________________.

Classify the following into (i) Operating Acivities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash Equivalents while preparing a Cash Flow Statement:
1. Cash Sales
2. Cash Received from Trade Receivables
3. Purchase of Building
4. Sale of Building
5. Issue of Share Capital or Debentures
6. Buy- back of Equity Shares
7. Dividend Paid
8. Interest paid on Debentures or Long - term Loans by (a) Finance Company (b) Non- Finance Company
9. Cash Purchases
10. Cash paid to trade payables
11. Redemption of Debentures and Preference Shares
12. Repayment of Long - term Loan
13. Office Expenses
14. Selling and Distribution Expenses
15. Manufacturing Expenses
16. Purchase of Goodwill
17. Sale of Patent
18. Purchase of Investments
19. Sale of Investments by (a) Finance Company (b) Non- Finance Company
20. Commission and Royalty received
21. Interest received on Investments by (a) Finance company (b) Non Finance company
22. Dividend received on Shares by (a) Finance Company (b) Non - Finance company
23. Rent Paid
24. Rent received if (a) Company's main business is property business (b) Other business
25. Income Tax Paid
26. Income Tax Refund received
27. Bank Balance
28. Short- term Deposits in Bank
29. Investment in Short - term or Marketable Securities

Q. For each of the following transactions, calculate the resulting Cash Flow and state the nature of Cash Flow, i.e., whether it is Operating, Investing or Financing:
(a) Acquired machinery for ₹2,50,000 paying 20% by cheque and executing a bond for the balance payable.
(b) Paid ₹2,50,000 to acquire shares in Informa Tech Ltd. and received a dividend of ₹50,000 after acquisition.
(c) Sold machinery of original cost of ₹2,00,000 with an accumulated depreciation of ₹1,60,000 for ₹60,000.

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