Question

Which of the following is a noncash investing and financing activity?

a.payment of a six-month note payable issuance of common stock to acquire land
b.payment of a cash dividend purchase of inventory on account

Answer 1

Issuance of common stock to acquire land is a non-cash investing and financial activity.

Step-by-step explanation:

Payment of note payable, payment of cash dividend and purchase of inventory on account all involve cash transactions.

Here, the issuance of common stock is a financial activity. Acquiring land can be categorized as an investing activity. To acquire land common stock is issued, cash is not involved.

So, the issuance of common stock to acquire land is non-cash investing and financial activity.