Question

The statement of cash flows for Baldwin shows what happens in the cash account during the year. It can be seen as a summary of the sources and uses of cash. Pleas answer which of the following is true if Baldwin issues bonds

Answer 1

The correct answer is c. It is a use of cash, and will be shown in the financing section as a subtraction.

Answer 2

If Baldwin issues bonds, it would result in an increase in the cash account. This is because when bonds are issued, the company receives cash from the bondholders in exchange for the bonds. Therefore, the true statement would be: "Issuing bonds would increase the cash account in Baldwin's statement of cash flows."