Using the Indirect Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
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When using the indirect method, where would the retirement of bonds payable at their maturity date be shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Question

Using the Indirect Method 
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
-
When using the indirect method, where would the retirement of bonds payable at their maturity date be shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Quizplus · Accepted Answer

The retirement of bonds payable at their maturity date is classified as a financing activity because it involves the repayment of debt, which affects the company's capital structure.