When Using the Direct Method, How Is the Retirement of Bonds

question 159

Multiple Choice

When using the direct method, how is the retirement of bonds payable at their maturity date shown on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Noncash investing and financing activity

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Definitions:

Property Taxes

Taxes levied by local governments on the value of real estate owned, which fund services like schools, fire departments, and local infrastructure.

Inherited Property

Property that individuals receive as a result of the death of the previous owner, transferring ownership through a will or by law.

Depreciation Basis

The initial cost of an asset that is used to calculate depreciation expense over the asset's useful life.

Decedent's Basis

The value assigned to a deceased person's property for tax purposes, determining the basis for heirs or beneficiaries for capital gains tax calculations when they sell the property.