The Appropriate Section in the Statement of Cash Flows for Reporting

question 91

Multiple Choice

The appropriate section in the statement of cash flows for reporting the cash received from the issuance of a long-term note payable is:

• A)Operating activities.
• B)Financing activities.
• C)Investing activities.
• D)Schedule of noncash investing or financing activity.
• E)This is not reported on the statement of cash flows.

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Definitions:

Financing Activities

Transactions involving obtaining resources from creditors and repaying them, as well as equity transactions with investors.

Net Cash

The amount of cash available after accounting for cash inflows and outflows over a period.

Financing Activities

Transactions related to raising and repaying capital, such as issuing stocks or bonds and paying dividends.

Net Cash

The amount of cash that is available after all debts and expenses have been paid.