On the Statement of Cash Flows, Cash Payments of the Principal

question 90

True/False

On the statement of cash flows, cash payments of the principal portion of promissory notes are classified as financing activities.

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Definitions:

Par Value

The face value of a bond or stock as stated on the certificate or instrument.

Fair Value

An estimate of the market value of an asset or liability, based on current conditions and knowledge, used in financial reporting and analysis.

Undervalued

Describes an asset or company being priced below its true intrinsic or market value.

Overvalued

Overvalued describes a situation where the market price of an asset is higher than its intrinsic value, often due to speculation or overestimation of its financial performance.